Burgess Thomson Lawyers

What Is A Caveat & Why You Should Consider Lodging One

Lodging a Caveat

What is a Caveat?

So, what is a caveat? A caveat is a statutory injunction and is used to protect interests in land. Caveats act as a block or freeze on the property and prevents the registration of dealing and plans on a title. The word caveat is Latin for “beware”, and lodging a caveat helps warn anyone dealing with a property that somebody has a prior interest. To be eligible to lodge a caveat you must have something called a caveatable interest.


So, what is a Caveatable Interest?

A caveatable interest refers to a legally recognised interest. There are many forms of caveatable interests which commonly include a:

  • Contractual right
  • Registered or equitable mortgage
  • Registered proprietor
  • Purchaser under an agreement for sale

Lodging a caveat without reasonable cause has serious consequences, including having the caveat removed and potentially facing an order requiring you to pay compensation to anyone who has suffered loss as a result of the caveat. Therefore, if you think you may have an interest in property it is important to seek legal advice to assess whether this interest will be legally recognised.


When might a Caveat be Helpful?

A caveat can be helpful in a range of circumstances, including, but not limited to the following.


Purchasing a Property

Signing a contract to purchase a property does not make you a legal owner. However, a caveat can be lodged against the property after exchange declaring the purchaser’s interest. This helps protect the purchaser from any potential dishonesty from a vendor who may try and sell to multiple people. Lodging a caveat does delay a property transaction, however, in certain circumstances this may be favourable. Further, if a settlement is going to be long for any other reason a caveat can ensure that a purchaser’s interest is recorded and legally recognised.


Relationship Breakdown

Caveats can become extremely helpful when going through a relationship breakdown. A partner may have spent years financially contributing to a property but, if the property is solely in the other partners name may stand to gain nothing from any potential sale. Therefore, a caveat can be used to highlight a legal interest in the property and also can help to ensure the asset is not sold without prior knowledge.


Secure a Loan

Caveats can be placed by banks or other lenders on property to make aware of their financial interest. This helps protect them to ensure that the property is not transferred without their prior knowledge or consent.


How to Lodge a Caveat

To lodge a caveat, it is recommended a party seek legal advice from a solicitor who can complete the required form on your behalf. Once a caveat has been processed it is recorded against the title on the Register. The person who lodged the caveat is known as the “caveator”.


How do you get rid of a Caveat?

Sometimes it may be necessary to remove a caveat from a property, this can occur in a number of different ways:

  1. Withdrawal – most commonly, a withdrawal form must be lodged with the NSW Land Registry Services. A withdrawal form is only a suitable solution if you are the caveator (that is, you are the person who lodged the caveat).
  2. Order of the court – if, however, there is a caveat against a property you own other remedies will need to be considered. The Supreme Court can make a ruling to either extend or remove caveats as they deem appropriate.
  3. The caveat lapses – caveats may also lapse if the interest they are protecting is satisfied by another dealing or the owner of the property lodges a Lapsing notice. The notice will cause the caveat to lapse unless the caveator obtains an order to extend the caveat.
  4. Caveator’s consent – it is also possible for a caveator to grant written consent for any registration on the property whilst the caveat remains active.


How can Burgess Thomson help?

The law around caveats can seem daunting and complicated. However, the team at Burgess Thomson has a wealth of experience dealing with property transactions and can help advise you as to the benefits and risks of placing a caveat on a property. The team can assist with considering, lodging and removing a caveat if necessary, and will ensure you remained informed throughout the process. Contact the team today to discuss more.


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