A caveat is a notice registered against a property's title to protect a person's claimed interest in that property.

While a caveat is in place, the registered owner will generally be prevented from selling, mortgaging or otherwise dealing with the property without the caveator's consent or the caveat being removed.

Importantly, lodging a caveat does not create an interest in the property. It records that someone claims to have an interest that they want to protect.

Caveats can be an important legal tool, but they should not be lodged without careful consideration. Whether you have the right to lodge a caveat will depend on the circumstances and the nature of your interest in the property.

Who can lodge a caveat on a property?

You cannot lodge a caveat simply because you have a disagreement with a property owner or believe someone owes you money.

You must have what is known as a caveatable interest in the property.

Under the Land Transfer Act 2017, there are specific circumstances in which a person may have an interest capable of supporting a caveat. Depending on the circumstances, this could include:

• a purchaser under an Agreement for Sale and Purchase
• someone with a beneficial interest in property under a trust
• a lender with an appropriate security interest over the property
• a person whose agreement with a property owner gives them an interest capable of supporting a caveat.

Determining whether an interest is actually caveatable can be complex. A property lawyer can assess your circumstances and advise whether lodging a caveat is appropriate.

When might a caveat be used?

There are several situations where a caveat may be used to protect an interest in land.

• Protecting a property purchaser
  A purchaser may have grounds to lodge a caveat after entering into an Agreement for Sale and Purchase, particularly where there is a significant period between signing the agreement and settlement or a substantial deposit has been paid.
• When an Agreement for Sale and Purchase is disputed
  A caveat may also be considered where a purchaser is seeking to protect their interest in a property after the vendor attempts to cancel the sale and purchase agreement.
• Protecting a lender's security
  In some circumstances, a person who has lent money may have an interest in a property that can be protected by a caveat, such as where the borrower has agreed to provide security over the property.
• Where the property owner has agreed to a caveat
  An agreement between a property owner and another party may provide for a caveat to be lodged against the property's title.

The fact that one of these situations applies does not automatically mean a caveat can or should be lodged. The specific legal interest still needs to be considered.

Can you lodge a caveat without reasonable cause?

Lodging a caveat should not be taken lightly.

If a caveat is lodged without reasonable cause, the caveator may potentially be liable to compensate someone who suffers loss as a result of the caveat being registered.

For that reason, it is important to obtain legal advice before attempting to use a caveat to protect an interest in property.

How do you lodge a caveat?

If your lawyer determines that you have a caveatable interest, they can assist with preparing the necessary documentation and arranging for the caveat to be registered against the property's title.

The first step is therefore usually establishing whether you have an interest that can legally support a caveat.

How can a caveat be removed?

A caveat does not necessarily remain on a property's title indefinitely.

It may be removed if the person who lodged it voluntarily withdraws it.

If the registered property owner believes the caveat should not remain in place and the caveator will not agree to withdraw it, there are legal processes available to challenge it. Depending on the circumstances, this can include applying to the Registrar-General of Land or the High Court.

If you have discovered a caveat on your property, it is important to get legal advice before taking action.

Need advice about a caveat?

Whether you are considering lodging a caveat to protect an interest in property or have discovered that a caveat has been registered against your title, getting advice early can help you understand your position and the options available.

Our experienced Property Law team can advise you on caveats, property titles and other property-related matters.

FAQs about property caveats