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Assurance fund

A key pillar in the Torrens system is that an interest in land which is registered should be secure, or else monetary compensation for the loss of that interest should be paid. The Assurance Fund provides the means by which such compensation is paid.

In South Australia, the Assurance Fund provisions are contained in Part 18 of the Real Property Act 1886. Section 201 establishes the Fund. The remaining sections deal with the criteria which determine whether compensation will be payable and the procedure to be followed before a claim will be admitted and paid. In general terms, the circumstances in which the Fund may be held liable for compensation fall within the following categories:

  1. Loss in consequence of fraud;
  2. Loss through the bringing of land under the Torrens system;
  3. Loss through the registration of any other person as proprietor;
  4. Loss in consequence of any error, omission, mistake, misfeasance or misdescription in the Register Book
  5. Loss of documents in the Land Titles Office.

The scheme of the Act is that proceedings should be taken first against the person whose action led to the loss (e.g. the person who acquired title to the land through a fraudulent act). If that person is dead, or has become a bankrupt, or cannot be found, or for whatever other reason compensation cannot be fully recovered from them, then proceedings can be taken against the Registrar-General for payment of the amount out of the Assurance Fund. An application for compensation from the Fund must be brought within twenty years from the time when the right to make such application first accrued. In some instances, it is possible for the amount of compensation payable from the Fund to be reduced if the applicant's loss or damage is attributable in whole or on part to the negligence of that applicant, or of a person through or under whom the applicant claims.

The fund consists of money raised by a two-dollar levy on certain classes of instruments during a period set by regulation plus interest which accrues on the money in the fund. The last such levy was raised during the period 26 April 1984 to 31 December 1988 on transfers, leases and surrender of leases and mortgages and discharge of mortgages.

If you believe that you may have grounds to make a claim, it is suggested you seek legal advice in the first instance. Further enquiries should be directed to