A caveat is a type of statutory injunction that prevents the registration of particular dealings with a property. It acts as a warning that someone other than the owner has an interest in a property.
When a caveat is lodged with Titles Queensland, the official government property registration system is adjusted, and the property owner is prevented from dealing with their property in certain ways.
A caveat can, for example, prevent the transfer or sale of the property, or prevent a mortgage from being taken out against it.
Caveats in Queensland are governed by the Land Title Act 1994 (Qld) (theAct). A person who lodges a caveat is a caveator, and a person against whose property a caveat is lodged is a caveatee.
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Am I entitled to lodge a caveat?
A person may apply for a caveat over a property if they a “caveatable interest” in that property. “Interest” is not defined in the Act, but theact states:
interest, in relation to land or other property, means—
(a) a legal or equitable estate in the land or other property; or
(b) a right, power or privilege over, or in relation to, the land or other property.
Interpretation Act 1954 (Qld)
Caveatable interests may include, for example:
a mortgage;
an easement;
a life estate;
a transfer;
a contractual right;
being a buyer under a sale agreement; or
being a lessee under an unregistered lease.
A caveatable interest may not include, for example:
future proceeds of the sale of a property;
court proceedings that have not been decided;
being a shareholder; or
being a beneficiary in a discretionary trust.
Who can lodge a caveat?
A person claiming an interest in a property;
the Titles Queensland registrar;
the registered owner of the property;
a person to whom a court has ordered that an interest in the property be transferred; or
a person who benefits from a court order that restrains a registered owner from dealing with the property.
Examples of situations where a caveat may be lodged
Some of the ways in which a caveat may be used include when:
a registered property owner wants to prevent a transfer of the property by a mortgagee exercising a power of sale;
both parties in a divorce have an interest in property but only one party’s name is on the title; or
a builder is owed money for a project built on a property.
A caveat may also be lodged in less common situations, such as by a person objecting to an application for adverse possession, or to an application for a water allocation.
What if I lodge a caveat without a caveatable interest?
There are serious consequences for lodging a caveat without having a caveatable interest. The caveat will generally be removed, and an order may be made to compensate any person who suffers a loss as a result of the lodgement. For example, if settlement of a property is delayed, the caveator may be liable to the property owner for any losses suffered, as well as any legal costs incurred.
How long does a caveat last?
A caveat prevents the registration of dealings with a property until the caveat lapses or is cancelled, rejected, removed or withdrawn.
A further caveat by the same caveator on the same grounds cannot be lodged unless a court grants leave (permission).
How do I lodge a caveat?
A caveat must be lodged with Titles Queensland. It must be signed by, or for, the caveator.
What detail is required to lodge a caveat?
The caveat application must contain details including:
the name and address of the caveator;
the name and address of the registered proprietor of the property;
the registered interest affected by the caveat;
the interest claimed by the caveator; and
the grounds on which the interest is claimed.
Can a property be sold with a caveat?
A property with a caveat cannot be sold unless the caveat lapses or is removed.
How do I remove a caveat?
In Queensland there are four ways a caveat can be removed:
by it lapsing;
via an application to the Supreme Court;
by cancellation by the Titles Queensland registrar;
by withdrawal by the caveator.
Lapsing
A caveat is either lapsing or non-lapsing. A non-lapsing caveat is one lodged:
by the property’s registered owner;
with the permission of the registered owner;
with a court order; or
by the Titles Queensland registrar.
Any other caveat is a lapsing caveat, which will automatically lapse three months after lodgement, unless the caveator takes court action to ensure the caveat remains.
If a person wants the caveat to lapse earlier than three months, they can serve a notice on the caveator. The caveator then has 14 days to take court action to prove the caveat should remain, or it will lapse. The person can then request the caveat be removed by the Titles Queensland registrar.
Application to the Supreme Court
A caveatee may apply to the Supreme Court for an order that a caveat be removed. The caveator must then show that they have a genuine caveatable interest, and that the balance of convenience supports the continuation of the caveat.
Cancellation
The Titles Queensland registrar may cancel a caveat if a request to cancel is lodged and the registrar is satisfied that:
the interest claimed has ceased, been abandoned or been withdrawn;
the caveator’s interest has been settled by agreement or otherwise satisfied;
the nature of the interest claimed does not entitle the caveator to prevent registration of another instrument that has been lodged; or
in relation to specific court proceedings, the proceeding for which the order was made has been discontinued or dismissed, or has otherwise ended.
The registrar must notify the caveator of the registrar’s intention to cancel the caveat at least seven days before cancelling it.
Withdrawal by caveator
A caveator may withdraw the caveat by lodging a request with Titles Queensland. This is often the fastest and most cost-effective way to resolve a caveat dispute.
How we can help
A caveat can be crucial to protecting your interest in a property. It is important you receive competent legal advice about caveats, especially considering property often involves substantial amounts of money. Gibbs Wright Litigation Lawyers can help you, whether you want to lodge or remove a caveat.
