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 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 and you can negotiate and agree to create a caveatable interest in their property, you can 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 specify who is responsible for drafting and lodging the caveat and who pays the lodgment fee.
• The agreement should contain a clause obliging the customer to grant and register a caveat over the property.
• There should be an agreed mechanism for withdrawal of the caveat
• The 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.

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 anyone who suffers a resulting financial loss.