If you have a legitimate interest in a piece of land and don’t want its owner to sell it, you may wish to lodge a caveat on the land’s title. However, it is important to ensure that you fully understand what caveats are and when you can legally use them before you lodge one. Failing to ensure this could result in serious legal consequences. This article will set out:

  1. the general legal principles surrounding caveats;
  2. the types of situations where you can use a caveat; and
  3. what a caveatable interest is.

What is a Caveat?

A caveat is a Latin word loosely meaning “warning”. When used in the legal context, it is commonly used to describe a formal warning placed on the title to land.  The caveat serves as a warning to any other party searching the title of the land that the person who lodged the caveat on title (caveator) has an interest in the land. Subsequently, it prevents any further dealing with the land until the caveator or a court has removed it.

For example, if you lodge a caveat on a property, the owner of the property cannot sell the land to a third party. They also cannot register any other interests on the land title to the property (such as a mortgage) until the caveat is removed. 

The removal of a caveat can only occur through:

  • a court order;
  • withdrawal by the caveator; or
  • the caveat being lapsed by the owner of the property by a lapsing notice.

What is a Caveatable Interest?

It is important to note that a caveat cannot be lodged randomly by anyone. To lodge a caveat, you must have a “caveatable interest”. A caveatable interest arises where you have a legal or equitable interest in the land.

A legal interest arises where you have an enforceable right to the land.

For example, this might be an option agreement to purchase the land. Or, it could be if a party gave the land to you as security for a commercial agreement. 

An equitable interest arises where you have a right to an interest in the land.

For example, you might have bought the land, but it is not yet registered in your name.

An equitable right also arises for the beneficiary of a trust who is entitled to property.

Consequences of Not Having a Caveatable Interest

However, where there is no legal or equitable interest in the land, there may not be a caveatable interest.  

For example, the fact you have a court judgment against someone for a debt does not automatically mean that a caveatable interest in land owned by that person exists. There needs to be a tangible connection between the debt that they owe and the land.

You should be able to support a caveatable interest with documents, such as contracts and agreements. It also should be supported by facts, such as:

  • dates of agreements; and
  • records of conversations.

Lodging a caveat without a caveatable interest means that the owner of the land can apply to lapse the caveat. They can do this through a lapsing notice.  

If you receive a lapsing notice, you have a specified amount of time to apply to court to justify why a caveat is required. Failure to provide such justification will result in the caveat lapsing. Further, if the court finds there was no such justification after a hearing, you could face having to pay the other party’s legal costs. Therefore, it is important to be clear about whether a caveatable interest exists.

I Have a Caveatable Interest, How Do I Lodge a Caveat?

The process of lodging a caveat varies from state to state around Australia, including:

However, most states require you to lodge a statutory declaration at your suitable land and title office. You will need to specify the:

  • details of the land;
  • owner of the land; and
  • caveatable interest.

Given the seriousness of the caveat and the implications that you could face if there is no valid caveatable interest, you should always obtain legal advice before lodging a caveat to ensure an interest exists.

Key Takeaways

A caveat serves as a warning registered on a land title that a third party (the caveator) has a caveatable interest in the land. Each state and territory in Australia has different laws relating to lodging caveats on property.

Before lodging a caveat, it is important to ensure you have a caveatable interest on the land. Failure to take this step and confirm the viability of the caveat could result in the caveat being lapsed. 

Note: LegalVision does not assist with lodging or removing caveats. But we hope you find this article helpful!

COVID-19 Business Survey
LegalVision is conducting a survey on the impact of COVID-19 for businesses across Australia. The survey takes 2 minutes to complete and all responses are anonymous. We would appreciate your input. Take the survey now.

About LegalVision: LegalVision is a tech-driven, full-service commercial law firm that uses technology to deliver a faster, better quality and more cost-effective client experience.

The majority of our clients are LVConnect members. By becoming a member, you can stay ahead of legal issues while staying on top of costs. For just $199 per month, membership unlocks unlimited lawyer consultations, faster turnaround times, free legal templates and members-only discounts.

Learn more about LVConnect

Emma Heuston
Our Awards
  • 2019 Top 25 Startups - LinkedIn 2019 Top 25 Startups - LinkedIn
  • 2019 NewLaw Firm of the Year - Australian Law Awards 2019 NewLaw Firm of the Year - Australian Law Awards
  • 2020 Fastest Growing Law Firm - Financial Times APAC 500 2020 Fastest Growing Law Firm - Financial Times APAC 500
  • 2020 AFR Fast 100 List - Australian Financial Review 2020 AFR Fast 100 List - Australian Financial Review
  • 2020 Law Firm of the Year Finalist - Australasian Law Awards 2020 Law Firm of the Year Finalist - Australasian Law Awards
  • Most Innovative Law Firm - 2019 Australasian Lawyer 2019 Most Innovative Firm - Australasian Lawyer
Privacy Policy Snapshot

We collect and store information about you. Let us explain why we do this.

What information do you collect?

We collect a range of data about you, including your contact details, legal issues and data on how you use our website.

How do you collect information?

We collect information over the phone, by email and through our website.

What do you do with this information?

We store and use your information to deliver you better legal services. This mostly involves communicating with you, marketing to you and occasionally sharing your information with our partners.

How do I contact you?

You can always see what data you’ve stored with us.

Questions, comments or complaints? Reach out on 1300 544 755 or email us at info@legalvision.com.au

View Privacy Policy