What is a Caveat and Why Do I Need One?

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. 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, a purchaser under an agreement for sale, a tenant (in certain circumstances), a 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• is formally withdrawn by the caveator; 
• lapses; 
• removed by a court order; or 
• the caveator consents to another’s registration that deals with the property’s title.

Any person with an interest in land or wishes to claim an estate may lodge a caveat. A person who has an Australian court order restraining the registered proprietor from dealing with a property can also lodge a caveat.

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. Lodging a caveat without reasonable cause is a serious matter. A court may order you to compensate any person who suffers a financial loss as a result of your incorrect caveat. 

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. 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

Key Takeaways

Lodging a caveat allows you to protect an interest in property, such as a registered mortgage. 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, call LegalVision’s litigation lawyers on 1300 544 755 or fill out the form on this page.