Whenever property in Hawaiʻi changes ownership, it must be recorded in one of two ways. The first and original way is by filing and recording in the Regular System, which occurs through the Bureau of Conveyances (BOC). The Regular System was established in Hawaiʻi in 1859 and was created to serve notice to anybody holding an interest in the real estate parcel when a new document was filed that would affect the property. When filing in the Regular System the documents that are delivered to the BOC “serves to give notice that a document is on public record(1).”
The second system, which was established in 1903 and was adapted from a land registration system created in the 1850ʻs by Australian Sir Robert Richard Torrens is the Land Court System, or Torrens System (2). When recorded with the Land Court system, there is “state certification for the ownership of a property(3)” and fee simple ownership of the property is guaranteed by the State. To put it simply, the Land Court system is the registration of the title by means of a single document called the Certificate of Title. In order for any ownership transfer or encumbrance to affect the title of the property, it MUST be recorded on the Certificate of Title. Properties that are recorded in the Land Court System are also referred to as registered property and with this system Certificate of Titles are issued to fee simple owners of registered property (4).
With the Regular System, there is no Certificate of Title and any document that is recorded that affects the unregistered property will be filed and recorded. According to a blog post from Natori Law Offices, “a document with defects will still be accepted as long as it meets Hawaiiʻs statutory requirements for recording(5).” With the Regular System, there is no Certificate of Title and any fee simple ownership is not guaranteed by the State, and the order in which documents are recorded will determine priority. Thanks to adequate title insurance, Buyers can be protected in the event of any false claims or encumbrances made against the property.
In some instances, real property are recorded in both the Regular System and Land Court System. This is referred to as Dual or Double System.
Generally, real estate that was once owned by the Hawaiian monarchy utilizes Land Court and the rest will be registered with the Regular System(6). However, for property under Land Court there is an option to have your property re-registered to the Regular System. We recommend talking to a Real Estate Attorney for more information on that. The property deed will show if the property is recorded in the Regular System or Land Court System and this is crucial information for you and your escrow team to be aware of when you are purchasing property in Hawaiʻi. Once you open escrow, whether the property is recorded in the Regular System or Land Court System will determine how escrow files and sends the deed documents to the Assistant Registrar of the Land Court office or if the deed is filed and recorded with the Bureau of Conveyances.
References:
- https://dlnr.hawaii.gov/boc/faqs/.
- https://lrb.hawaii.gov/wp-content/uploads/1987_TwoLandRecordingSystems.pdf).
- https://dlnr.hawaii.gov/boc/faqs/
- https://www.tghawaii.com/wp-content/uploads/Land-Court-vs-Regular-System-compressed.pdf
- https://www.attorneyinhawaii.com/hawaii-regular-system-and-land-court-recording-system.html
- https://www.hawaiimortgage.net/hawaiis-awkward-title-systems/
- https://www.courts.state.hi.us/wp-content/uploads/2016/03/article-about-land-court-by-judge-gary-chang-September-2017-Haw-Bar-Journal.pdf