What is a Caveat and Why Do I Need One?

A caveat is a type of statutory injunction preventing the registration of particular dealings with real property. Additionally, a caveat acts as a warning or formal notice to tell the public that there is an interest on the land or property for a particular reason. The word caveat means ‘beware’ and lodging a caveat on real property warns anyone dealing with the property that someone has a priority interest in that property. The party who lodges a caveat is also known as a caveator. In this article, we explain how to lodge a caveat and why you may need to do so.

Reasons for Lodging a Caveat

If you have an estate or interest in land through which registration of another dealing cannot protect, you may consider lodging a caveat to protect your legal position. This is known as a caveatable interest. You must ensure that you have a genuine interest at the time you are lodging the caveat.

Caveatable interests include a:

• registered or equitable mortgage;
• transfer;
• purchaser under an agreement for sale;
• tenant (in certain circumstances);
• registered proprietor; and
• contractual rights.

Each state and territory has an individual system of lodging caveats. For example, in NSW, the Real Property Act 1900 governs caveats. When a caveat is lodged at the Land & Property Information (LPI), it effectively prevents the registration of further dealings on the property’s title until the:

• caveat is formally withdrawn by the caveator; 
• caveat lapses; 
• caveator consents to another’s registration that deals with the property’s title; or
• caveat is removed by a court order.

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 where notices can be served;
• the name and address of the registered proprietor (we recommend that you complete a title search to ensure this information is correct);
• 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 Happens if I Incorrectly Lodge a Caveat Without a Caveatable Interest?

Only a person who has a caveatable interest can lodge a caveat. Further, lodging a caveat without reasonable cause is a serious matter. When determining whether or not there was ‘reasonable cause’ the court will look at whether the caveator held an honest belief that they had such an interest, based on reasonable grounds. However, if it is found that the caveat was lodged incorrectly, it will be removed from the Register. Additionally, a court may order you to compensate any person who suffers a financial loss as a result of your incorrect caveat. 

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Challenging or Removing Caveats

A caveat can be challenged or removed in a number of ways, including the property owner issuing a lapsing notice or the caveator submitting a withdrawal of caveat form. Additionally, in some states, a caveat may be removed by obtaining written consent from the caveator when a new dealing or plan is registered. We have published four articles about removing a caveat in the following states:

1. Victoria;
2. New South Wales;
3. Queensland; and
4. Western Australia.

Legislation Governing Caveats

The law governing caveats varies in each state and territory. The table below outlines what legislation applies in each:

Key Takeaways

Lodging a caveat allows you to protect an interest in property, such as a registered mortgage. Before lodging a caveat, you should take steps to ensure you have a caveatable interest in the property. Otherwise, you may be liable to pay compensation to the wronged parties due to an incorrectly lodged caveat.

Frequently Asked Questions