What is the notable exception to the indefeasibility principle?

• A. A lease of 3 years or less where the tenant is in occupation
• B. A lease of more than 20 years
• C. A mortgage that is not registered
• D. A transfer by gift

Answer: (A)

Indefeasibility of title means that once a title is registered, it cannot be challenged except for certain recognized exceptions. The strongest and most commonly tested exception is a lease of three years or less where the tenant is in actual occupation. That short lease creates an occupier’s interest that binds the land regardless of subsequent transfers of title, so the new owner takes subject to that lease. The idea is to protect the rights of someone in possession under a short-term tenancy; possession gives real rights that the registry system recognizes as prevailing over mere indefeasibility.

Longer leases are treated differently and generally must be registered to bind future owners, so they don’t override indefeasibility in the same way. A mortgage has to be registered to affect title, and a transfer by gift changes ownership but is governed by registration of the transfer itself, not by an exception to indefeasibility. That makes the short lease in possession the notable exception.