Lodge a Caveat
A caveat is one of the most fundamental mechanisms in property law, and it can be a very powerful tool to protect your legal interest in a property. Understanding how caveats operate, and how to utilise them, can be crucial in order to save considerable time and costs in a legal proceeding.
Call Gibbs Wright Litigation Lawyers today for advice on lodgement and court proceedings in relation to an interest in land, or to withdraw or defend a proceeding in same.
It is important that you receive competent and experienced advice in caveat matters, in particular because property often involves substantial amounts of money.
A caveat is a legal document providing notice to other parties that you have a legal interest in a property to prevent the registration of other dealings on the property without your consent.
In Queensland, a caveat is effectively a notice to the Registrar of Titles at the Department of Natural Resources and Mines (DNRM) that you have a legal claim to the property, and no further interests in or dealings on the property should be claimed or lodged by another party until the caveat is either cancelled, withdrawn, removed or lapses to ensure your legal interests are preserved.
The primary purpose of a caveat is to prevent another party from dealing with property in a way that may adversely affect someone else’s interest in the property.
A caveat may:
- Prevent the sale or disposition of the land without the consent of a party with an interest in the property;
- Allow further time for a party with an interest in the property to apply to the court to enforce or determine an interest in the land; or
- Allow time for a party with an interest in the property to alert a third party as to their legal claim to the property.
A person or entity may have a legal interest in property even where the property is registered in someone else’s name. As such, caveats are commonly used in circumstances where there has been a relationship breakdown in order to sufficiently protect the rights of all parties with a legitimate legal interest in the property.
In Queensland, caveats are lodged with the Titles Registry and will automatically lapse 3 months after lodgement, although there will generally be an option to renew the caveat once the 3 months have lapsed.
Warning: If you lodge a caveat you may receive a notice requiring you to commence legal proceedings within 14 days (in Queensland, that is in the Supreme Court of Queensland). The typical risk of such an application is usually between about $10,000 and $20,000 (and the lapsing of the caveat) if you lose.
Obtaining experienced advice prior to lodging a caveat is highly recommended.
In order to lodge a caveat, you must have a ‘caveatable interest’ in the property.
A ‘caveatable interest’ generally includes any legal or equitable interest in real property. Any person with a caveatable interest may lodge a caveat, including:
- A person claiming an interest in land;
- A person to whom an Australian court has ordered that an interest in land be transferred to;
- A purchaser under an instalment contract; and
- A person who has the benefit of a subsisting order of an Australian court in restraining the registered proprietor (owner) of the land from dealing with the land.
It is important to note that you will not have sufficient rights to lodge a caveat over a property merely because someone owes you money.
Protection of future proceeds of the sale of land (in almost all circumstances) does not create an interest that supports the existence of a caveat. The same applies for court proceedings that have not yet been decided. It is important to avoid the improper lodgement of a caveat on title as the consequences of doing so may be significant.
There are many different reasons why a caveat may be removed. The most common reason for removing a caveat involves circumstances where the caveator’s interest in the land has been settled, withdrawn, lapsed, ceased, abandoned or otherwise satisfied.
In Queensland, under section 128 of the Land Title Act 1994 (Qld), a registered proprietor of land may apply to the Registrar of Titles at the Titles Office to have a caveat removed in three different ways:
- By serving a notice to withdraw a caveat that has lapsed;
- By applying to the Supreme Court to have a caveat removed; or
- By applying to the Registrar of Titles to have the caveat cancelled where the Registrar is satisfied that:
- The interest claimed has ceased, been abandoned or withdrawn;
- The caveator’s interest has been settled by agreement or has otherwise been satisfied;
- The nature of the interest claimed does not entitle the caveator to prevent the registration of another instrument that has been lodged; or
- In relation to court proceedings, the proceeding for which the order was made has been discontinued, dismissed or has otherwise ended.
It is worth mentioning that there is no actual obligation for a caveator to remove a caveat on title. However, the implications of unreasonably leaving a caveat on title may have legal implications (particularly in relation to costs) if legal action is brought and the court determines that a caveat that has been lodged on title is unreasonable. To prevent costly penalty interests, long delays and unnecessary legal fees, it is important to be aware of the implications of lodging caveats early on in any legal proceeding. Having caveats removed as soon as possible may reduce the risk of delay in settlement.