A caveat is a type of statutory injunction preventing the registration of particular dealings with real property (i.e. real estate). It is a formal public notice or warning advising that there is an interest on the property for a particular reason.
The word caveat means ‘beware’ and lodging a caveat warns anyone dealing with the property that someone claims a priority interest in that property. The person lodging a caveat is a caveator.
Reasons for Lodging a Caveat
If you have a genuine interest in land (such as a registered mortgage), you may lodge a caveat to prevent registration of another dealing and protect your legal position. This is known as a caveatable interest.
Caveatable interests include:
- a registered or equitable mortgage
- a transfer
- a purchaser under an agreement for sale
- a tenant (in certain circumstances);
- a registered proprietor and
- contractual rights.
In NSW, the Real Property Act 1900 governs caveats. When a caveat is lodged at NSW Land Registry Services (NSWLRS), it prevents the registration of further dealings on the property’s title until the caveat:
- is formally withdrawn by the caveator;
- lapses;
- is removed by a court order; or
- the caveator consents to a registration by another party dealing with the property’s title.
Anyone with an interest in land or who wishes to claim an interest may lodge a caveat. A caveat can also be lodged by someone with an Australian court order restraining a registered proprietor from dealing with the property.
In NSW lodgement of caveats is electronic by a subscriber to PEXA (such as a solicitor or a licensed conveyancer).
What Detail Does a Caveat Require?
In NSW, when lodging a caveat, you need to include:
- the caveator’s name and residential address or registered office, including an address for service of notices;
- the name and address of the registered proprietor (we suggest that you do a title search to ensure the correctness of the information);
- reference details for which the caveat relates;
- particulars of the legal or equitable estate of interest;
- a verified statutory declaration; and
- the signature of the caveator, lawyer or another agent of the caveator.
What if I Incorrectly Lodge a Caveat Without a Caveatable Interest?
Only someone with a caveatable interest can lodge a caveat. Lodging a caveat without reasonable cause is a serious matter. A court may order you to compensate anyone who suffers a financial loss as a result of your incorrect caveat.
Challenging or Removing a Caveat
Ways in which a caveat can be challenged or removed include the property owner issuing a lapsing notice and the caveator submitting a withdrawal of caveat form.
