A caveat is a type of statutory injunction preventing the registration of particular dealings with real property. In NSW, the Real Property Act 1900 governs caveats. 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 known as a caveator. We explain below how to lodge a caveat and why you would need to do. 

Lodging a Caveat

In NSW, 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 the following:

  • Formally withdrawn by the caveator; or
  • Lapses; or
  • Removed by an order of the Court; or 
  • The caveator consents to another’s registration dealing with the property’s title.

What Detail is Required on a Caveat?

In NSW, when completing a caveat for lodgment, you are required to include the following information:

  • Caveator’s name and residential address/registered office including an address where notices can be served;
  • 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, solicitor or another agent of the caveator.

Why Lodge 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 this interest in the land is present at the time you are lodging the caveat.

Caveatable interests include a registered or equitable mortgage, transfer, a purchaser under an agreement for sale, a tenant (in certain circumstances), a registered proprietor and contractual rights.

What Happens if I Incorrectly Lodge a Caveat Without a Caveatable Interest?

Only a person who has a caveatable interest is entitled to lodge a caveat or to instruct their lawyer to lodge a caveat on their behalf. Lodging a caveat without reasonable cause is a serious matter, and you may be liable to compensate any person who suffers a resulting pecuniary loss. 

In Short

Before lodging a caveat, take steps to ensure you have a caveatable interest in the property otherwise you may be liable to pay compensation to the wronged parties. If you need advice on your caveatable interest or assistance with drafting a caveat, let our commercial lawyers know. 

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