The Records Consultation Committee of Latin America (Comité Latinoamericano de Consulta Registral) just held its annual meeting in Havana (for the first time).
For a full week, most countries in Latin America showcased their recording systems (for land titles as well as for other rights over diverse assets) in an informal and non-professorial environment that lends itself for an interaction among different legal systems that enriches all participants through the experiences of their peers.
By peers I mean those in our Hemisphere in charge of keeping in good order what we in the US call the public records (pertaining to land, among other valuable assets) and making them accessible to the general public. Even if I regularly attend these meetings of the “Comité” since its creation in the last quarter of the twentieth century, I am not one of their peers. I attend as a special invitee from the US, a country that, not being part of Latin America –with the possible exception of South Florida-, is not even a member of the organization, and my interactions with recording offices around the world, frequent as they are, place me on the other side of the consultation window, as part of that public that needs answers to questions such as who owns what?, is it owned free and clear?, and the like. Many of these interactions have been on behalf of foreigners who contemplate investing in a country they often know little about.
So it was in such a non-peer state of mind that I attended this first meeting ever of the “Comité” in Cuba, a state of mind that always mingles with a state of heart that makes my emotions hard to fathom every time I visit the land where I was born.
I had never attended a conference at Havana’s Convention Center or “Palacio de Convenciones” and I was very well impressed by the efficiency with which the place is run, the access to the web via Wi-Fi being the one deficit (it is extremely slow and unreliable).
The presentations made by the Cuban delegates –most of them very young and very bright- were celebrated by many of those in attendance as extremely thorough and soundly based on the well known (although not among us in the US) legal principles that sustain the best practices the world has when it comes to recording –specially land title recording- laws. This may be tough to swallow for some of my friends and colleagues in the American real estate business, but no, our practices are not the best practices when it comes to land title registration and/or real estate settlement procedures, and every one in the world-wide Law community knows this except for us.
Since 1998, Cuba has been working hard in restoring the very sound recording system it had before the Cuban Revolution, while adapting it to the political and socio-economic model the Revolution introduced. It has been a long process, often shifting speeds, but a persistent and uninterrupted process nonetheless, and kept in the same very capable hands of a group of bright lawyers who work for Cuba’s “Ministerio de Justicia” or Justice Department, colleagues I have had the privilege to know since the foundations of the present recording system were laid.
My sense is that Cuba’s present recording system, the product of that process of recovery, has safely arrived to port –its interaction with other aspects of Cuba’s legal system still has to be fluid enough for it to work- and should be able, by itself, to provide the required level of legal safety or certainty (or “seguridad juridica”) for commercial transactions on recorded rights and assets.
We in the US have title insurance because our recording system cannot, by itself, provide that required level of legal certainty to all transactions (the last Chapter of the first version of the Real Estate Settlement Procedures Act –RESPA- shows that, way back then and in an unusual showing of humility, we even acknowledged that…). My expectation is that our title insurance industry will jump at the opportunity to insure titles in Cuba under the present circumstances –if we in the US allow that-, and even if Cuba rejects that (as it should, since Cuba should strive to have a recording system that stands on its own merits, as the Spanish system it is roughly modeled after does).
But it was funny to see how the sole mention of title insurance still drives some of my friends among the Spanish Registrars out of their wits. One of them, extremely intelligent (and a very good and dear friend of mine), became apoplectic to the point of claiming, in a pedantic display of arrogance but still nonsensically, that the reason why only 5 % of the title insurance policies issued in the US end up in a claim is that the title insurance industry spends 90 % of the money paid for each premium in overcoming the limitations of our recording system and making sure the particular title they are insuring under each policy is kosher.
Can you imagine the stealth behemoth our title insurance industry is paying its indispensable agents and its even more indispensable lobbyists out of 5 % of the money paid by their insured parties and still making the huge amounts of money they make?
Chill out, my friends! The Spanish real estate market is still too small after the early century crisis (crash) to attract this “only in America” industry. But if and when it recovers, I would not be surprised to find some of its present detractors selling title insurance policies in Spain; because if an investor wants it, the only sensible thing to do is selling it to him in order to close the deal.
And Americans have been all but indoctrinated to want it: “seremos como Stephen Ross”…