What is a caveatable interest?

It is important to determine whether you have a caveatable interest in land before you lodge a caveat.

The Real Property Act (NSW) provides that a person may lodge a caveat with the Registrar-General if they are entitled to a legal or equitable interest in land. The Registrar-General will generally not register any dealings that are inconsistent with your caveatable interest.

How do I know if I have a caveatable interest?

Only those with an express interest in the property (such as a chargee or mortgagee) can claim a caveat. 

A court judgment against another person does not create a caveatable interest in that person’s property. If you have obtained a judgment against someone, you may be able to negotiate and agree to create a caveatable interest in their property. You can then lodge a caveat to protect your interest.

How do I lodge a caveat?

In NSW, a subscriber to an Electronic Lodgement Network Operator lodges an online application to NSW Land Registry Services.

Including a provision in an agreement charging land

Someone owing you money is not in itself sufficient to give you a caveatable interest. If you provide goods and services and wish to create a caveatable interest and charge the customer’s real estate, you should consider the following:

• The agreement should contain a clause obliging the customer to grant and register a caveat over the property.

• Is there an agreed mechanism for withdrawal of the caveat?

• your agreement should take into account that each State has different requirements for lodging caveats.

A caveat must be lodged in a particular form and manner, satisfying any formal rules.

The agreement should specify who is responsible for drafting and lodging the caveat and who pays the lodgment fee.

What if the caveat has not been lodged properly?

If you lodge a caveat without having a caveatable interest or a reasonable cause, you may be liable to compensate any person who suffers a resulting pecuniary loss.