What is a Caveat?

A caveat is a formal registration of a legal or equitable interest in land. If you are the owner of land in NSW and someone has lodged a caveat on your land, the Registrar-General will send you written notice. Lodging a caveat can prevent further dealings with the property until the caveat is removed. 

How to remove or withdraw a caveat

1.    Formal Withdrawal

The person lodging the caveat (the caveator) can withdraw it by instructing a solicitor or conveyancer who subscribes to an Electronic Lodgment Network Operator (ELNO) to prepare and lodge a Withdrawal of Caveat electronically with NSW Land Registry Services .

2.    Lapsing

A caveat can lapse when:

• the caveator’s interest is satisfied because another party registers another dealing;
• the registered owner or a party with registered interest lodges an Application for Preparation of Lapsing Notice; or
• a party lodges a dealing that the caveat prevents together with an Withdrawal of Caveat.

If the caveator refuses to withdraw formally, the property owner or another interested party may electronically lodge an Application for Preparation of Lapsing Notice to remove the caveat. The property owner may register another dealing on the land, which the caveat prevents, and apply for the lapsing of the caveat. The caveat will lapse and expire 21 days after the Notice has been lodged.

3.    Court Orders:

a.    Extending a Caveat

A caveator can apply to the Supreme Court of NSW for an order to extend the caveat. They must make the order and lodge it with the Registrar within 21 days after receiving the lapsing notice.

A court will only honour a caveator’s order if the claim has ‘substance’. The onus of proof is on the caveator, and the court will decide whether the balance of convenience favours retaining the caveat.

Where a caveator is served with a lapsing notice and does not want their interest removed, they can give their written consent to extend the caveat.

Removing a caveat by lapsing is most appropriate where it is unlikely the caveator will fight back or commence proceedings, and will instead either consent or allow the caveat to lapse willingly. Alternatively, lapsing is the best option where you cannot locate the caveator or they no longer exist.

b.    Withdrawing a Caveat

A party can apply to the Supreme Court of NSW for an order that a caveat be withdrawn. This option is suitable if the need to remove the caveat is urgent, or where opposition from the caveator is expected. The caveator bears the burden to establish a caveatable interest and reasonable cause. (Real Property Act Part 7A)

Summary

Deciding which process to use to remove a caveat depends on the circumstances.

If:

• the caveator no longer has an interest or wishes to withdraw, they can do so by a formal withdrawal;
• you wish to remove the caveat and consider a dispute unlikely, you should file an Application for Preparation of Lapsing Notice;
• the need to remove the caveat is urgent, or you anticipate a dispute, an application to the Supreme Court of NSW may be the best option.