What is a Caveat?
A caveat is an instrument which may be lodged by a person (the ‘caveator’) claiming an interest over another person’s (the ‘caveatee’) real property.
Caveats serve as a notice that the caveator is claiming an interest in the land, and prevent any further dealings with the land until the caveat is removed.
Caveats can be useful in commercial disputes between parties in relation to a party claiming an interest in property, and in some family law matters will also help protect the interests of a party who is not a registered proprietor of the property.
Who can lodge a caveat?
A person with a legal or equitable interest in land may lodge a caveat over the land to protect their interest.
Examples of persons with a caveatable interest in land include:
a. A Purchaser under a contract of sale that has an equitable interest in the property they are purchasing prior to completion;
b. A Lessee under an unregistered lease (an equitable lessee);
c. A Lender under a Loan agreement which creates a charge or security over the Borrower’s real personal property (an equitable mortgagee) to secure the money under the Agreement; and
d. A party to a marriage where there is a home in their spouse’s name solely, who has contributed to the mortgage and/or made improvements to the property.
You should, however, seek legal advice to ensure you have sufficient grounds to lodge a caveat because if a caveat is improperly lodged, the caveator may be liable to compensate the owner of the property or anyone else who suffers loss or damage as a result of the caveat.
Types of Caveats
Under Queensland law, caveats are either lapsing or non-lapsing.
Non-lapsing caveats can be lodged either:
1. By the registered owner;
2. With the consent of the registered owner;
3. By the Registrar of Land Titles; or
4. By order of the court.
If none of the above apply, a lapsing caveat may be lodged, if there are sufficient grounds for doing so. A lapsing caveat will remain in effect for three (3) months, after which time it will lapse unless the caveator commences proceedings to protect their interest.
For equitable mortgagees, even with the consent of the registered owner, only a lapsing caveat may be lodged. Equitable mortgagees should register a mortgage over the property to create a legal interest in the property and obtain the best available protection.
Removal of Caveats
Non-lapsing caveats can only be removed through an Application to the Supreme Court, or in some cases by applying to the Registrar of Land Titles.
In addition to the above options, a lapsing caveat may also be removed by the caveatee serving a lapsing notice on the caveator. This notice provides that the caveator has fourteen (14) days to commence legal proceedings to prove their caveatable interest, otherwise their caveat will lapse.
Both a lapsing and non-lapsing caveat may also be removed by the withdrawal of the caveat by the caveator, which may be achieved whereby the parties agree on a settlement.
The Next Step
If you are considering lodging a caveat, or seek to have one removed from your property, and would like to discuss your options, we would be pleased to hear from you.
Glaser Lawyers offers all clients a complimentary and obligation free consultation.
We look forward to working with you to achieve your aims and protect your interests.
Please call 1300 000 770 or email admin@glaser.net.au to make your appointment.
