What is a caveat and why is it important in property law matters in Australia? A caveat is a form of statutory injunction that restricts other people from taking interest in a place or property.
It is necessary for the person filing this legal notification to have a caveatable interest in the property in question. To have this kind of interest, one must have a legal or equitable stake in land.Some of these interests include a:
- Legal document such as a recorded mortgage;
- Transfer;
- Purchaser seeking property settlement under a sales contract;
- Tenant (under certain conditions);
- Registered proprietor; and
- Contractual rights.
Typically, property disputes centre on parties arguing over the legality of caveats. This is a typical situation. George, for example, signed a deal to sell a new home. Since he has an interest in the land, his agent and lawyer suggested that he file a caveat.
This precludes sellers from selling the property to another party and guarantees that no one can purchase the property.The Land Titles Office or the appropriate Registrar of Titles of the state or territory where the property is located may receive a caveat.
A caveat is valid until it someone removes cancels it, or if it expires. It’s also important to note that not everyone can lodge a caveat. The implications of filing a caveat without a caveatable interest are extremely serious.
Parties may be subject to orders for the payment of fees related to the caveat, and the caveat will be withdrawn from the Register. Read on to know more about what is a caveat.
What Is a Caveat: Relevant Acts
State/Territory | Legislation |
Australian Capital Territory | Land Titles Act 1925 (ACT) |
New South Wales | Real Property Act 1900 (NSW) |
Queensland | Land Title Act 1994 (QLD) |
Victoria | Transfer of Land Act 1958 (VIC) |
South Australia | Real Property Act 1886 (SA) |
Northern Territory | Land Title Act 2000 (NT) |
Western Australia | Transfer of Land Act 1893 (WA) |
Tasmania | Land Titles Act 1980 (TAS) |
Why Is a Caveatable Interest Important?
What is a caveat and how do you lodge one? As mentioned, a person needs to have a caveatable interest in order to lodge a caveat. Being a party to a de facto relationship or marriage, or having the right to file a family law claim, does not automatically give a caveatable interest to a party. However, the following may result in an interest:
- Certain non-financial contributions (Unpaid property or house maintenance)
- Monetary contributions made towards the down payment (Property improvements)
- Repairs on the property
Note: People who want to lodge a caveat without having interest in the property may be liable to pay compensation.
Lodging a Caveat in NSW?
Lodging a caveat in NSW will require:
- The caveator’s (the person lodging the caveat) name, residential or business address, and the mailing address for formal notice purposes
- The registered owner’s name and address. A title search is necessary to ensure that this information is credible
- Reference details for which the caveat applies
- Specifics of the interest’s legal or equitable estate
- The signature of the caveator, their attorney, or another representative/agent
What is a caveat and how do you lodge one in NSW? Here are the steps.
- Although not mandatory, it is highly advisable to seek a conveyancing solicitor to fill out necessary caveat forms and relevant exception form.
- Ensure all fees are paid and electronically file the caveat to the NSW Land Registry Services (NSW LRS)
- NSW LRS reviews the supplied paperwork. The estate or interest claimed must be described in detail. Additionally, specifics of any instrument and/or evidence supporting the claim must be provided.
- If the caveat satisfies the standards for lodgement, the Register is modified to reflect its lodgement. The caveat is entered against the title in the Register once it has been processed.
- NSW LRS notifies the applicant of the caveat and notifies the registered proprietor if they are not the caveator.
What is a Caveat: Challenging or Removing Caveats
A person can remove or challenge a caveat in a variety of ways. The legal owner may choose to remove a caveat by giving a lapsing notice.
A “withdrawal of the caveat form” submitted by the caveator is one more method. Additionally, in certain states, a new dealing or plan may be recorded with the caveator’s written agreement, lifting the caveat. In New South Wales, what is a caveat and how is one removed? Here are four ways:
1. Formal Withdrawal
The caveator must:
- Withdraw the caveat
- Sign and complete a withdrawal of caveat form (Form 08WX from the Land and Property Information Office)
- Lodge the withdrawal fee
Note: Again, it’s important to seek legal advice when formally withdrawing a caveat.
2. Lapsing
This may occur when:
- The caveator’s interest is fulfilled because another party registered a different transaction. For instance, if the caveator is an unregistered mortgagee, the discharge of the mortgage will satisfy his/her interest in the property,
- The registered owner or a person with a registered interest submits the application for the creation of a lapsing notice,
- A party submits an application for the creation of a lapsing notice along with a transaction that the caveat prohibits.
3. Court Order
The Supreme Court has the authority to decide whether to add or remove a caveat. Following a caveat decision, NSW LRS will act on the lodging party’s instructions to extend, withdraw, or delete the caveat in compliance with court orders.
4. Obtaining the Caveator’s Consent
Although a caveator might not want to see their caveat lifted, they might not object if an agreement or plan is filed and registered. For instance, a caveator asserting that they are an unregistered mortgagee may not object to a property lease. In these circumstances, the caveator may consent in writing to the following dealing’s registration.
Our Property Lawyers’ Expertise
We have now discussed what is a caveat, how to file for one, and how to remove it as well. When it comes to caveats on a property sale, legal conflicts can occur. One could argue, for example, that the caveator never had a caveatable interest in the land in the first place.
When it comes to property law matters, it’s important to seek legal advice from the best conveyancing solicitors. We at JB Solicitors also cater to property law matters and help protect our client’s interests. Our team of conveyancing solicitors can further explain the legal implications of property law matters.
We can also determine whether our clients are eligible to lodge a caveat or remove one legally. Our fixed fees can help clients know how much they will pay for our property and family law matters.
Contact us today if you have more questions like ‘what is a caveat?’