A caveat is a statutory injunction that prevents the registration of particular dealings and plans on a title to land, provided for under Real Property Act 1900 (NSW) (the Act).
What is the purpose of a caveat?
A caveat effectively operates like a “red flag” signalling to a potential buyer that someone (the caveator) is claiming an interest in the land. It provides a means to protect your interest in a property by preventing any further dealings occurring on the properties title.
When can I register a caveat?
In order to put a caveat on a property you must have a genuine caveatable interest in the land. You cannot put a caveat on a property simply because you want to.
What type of caveats exist?
Examples of caveatable interests include:
- An interest under a lease (in certain circumstances);
- An interest as someone who has been granted a charge over the property as security for performance of an obligation, such as in a Settlement Deed or Agreement;
- An interest to purchase a property under a contract for sale;
- An interest under a registered or equitable mortgage;
- An interest as an equitable owner of the property; and
- An interest under an easement or restrictive covenant that binds the land.
What types of non-caveatable interests exist?
You cannot lodge a caveat unless you have a caveatable interest. If you do so you could be liable for damages to a person who suffers loss or damage and potentially court costs as a result of the caveat under section 74P of the Act.
Examples of non-caveatable interests include:
- a beneficiary under a discretionary trust, a claim under the Family Law Act 1975 (Cth) or Succession Act 2006 (NSW) where not part of the Settlement Deed or agreement;
- debts where there is no agreement between the creditor and debtor which grants the creditor(s) a security interest in the property; and
- A claim for damages against the owner of the land.
Summary
In short, caveats are not enforcement tools to be used as leverage when someone owes you money when a formal agreement does not allow for one.
Caveats must be lodged online in New South Wales and only through a solicitor or licenced conveyancer.
Please do not hesitate to contact Connor & Co Lawyers on (02) 9299 6696 should need assistance with a caveat.
About Connor & Co Lawyers
We are a Law firm located at Level 5, 50 Margaret Street Sydney NSW 2000 specialising in Business law, Banking & Finance, Dispute Resolution, Litigation and Environment & Planning matters.
Email: contact@connorco.com.cau Website: www.connorco.com.au: Phone: 0292996696