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Caveats are statutory injunctions that restrain dealings on property for brief periods of time so that legal rights can be exercised. Caveat disputes arise in a number of contexts and typically on an application to remove (a.k.a. withdraw) or extend the caveat. The following article explains some of the basics regarding this area of the law as it relates to NSW..
What is a caveat?
A caveat is a statutory injunction that prevents certain things from taking place such as the recording of a property dealing on the register of titles. Depending upon how it is described it can prevent other matters such as the registration of a plan. It must ultimately be remembered that a caveat is simply a statutory procedure to stop dealings on a property (if so describe) and in that sense it doesn’t create any underlying rights. The underlying rights that support a caveat do not arise from the statutory mechanism that stops dealing.
What is a caveatable interest?
There is no real and comprehensive explanation of what a caveatable interest is so far as the author is aware. What is critical is for there to be compliance with the Real Property Act and the regulations to it and decided cases when describing the interest.
Caveatable interests can arise in a number of contexts including unregistered dealings such as when someone buys real property and there is the inevitable timelag between the exchange of contracts and completion. In that sense, the purchaser may have an equitable interest during that period.
Particular care must be taken in describing the nature of a caveatable interest and is in the author’s opinion best left to seasoned property lawyers or conveyancers who are familiar with the topic. As a litigation lawyer the author has some experience in attacking the validity of the descriptions (as opposed to going about describing them)
How do you lodge a caveat?
In order to lodge a caveat the person must have an underlying right to do so by for instance having a legal or equitable interest in the land. As our law firm focuses on disputes it does not assist with the lodging of a caveat, however, the basic requirements are:
- it needs to be lodged on the appropriate form (and these days that occurs online through an interface such as PEXA) and note the appropriate details such as the name of the caveator, the registered proprietor and certain prescribed particulars such as the nature of the legal or equitable interest.
- certain particulars also need to be stated such as the facts on which the caveat is founded.
- etc.
Can you be liable for wrongfully lodging a caveat?
A person who wrongfully lodges a caveat could very well end up being liable for the costs of removing the caveat and compensating the registered proprietor for losses suffered. It may also be a factor relevant to a person’s professional standing if that professional person lodged a caveat without reasonable cause.
How do you remove or withdraw a caveat in NSW?
Essentialy a caveat can be removed in 3 ways.
- the person lodging the caveat can withdraw it by using the appropriate form;
- the caveat can lapse following the expiry of the lapsing notice; or
- the court can order that it be removed (or withdrawn). Our focus is on removal of caveats when there is a dispute.
For more information on the legislation that facilitates this see: s 74 of the RPA.
Resources regarding caveats in NSW
- NSW Land Registry Services
- Withdrawal of Caveat
- When a deregistered company has a caveat over your property
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How we help with removing or extending caveats
Our law firm can assist a registered proprietor in dealing with a caveat that was wrongfully lodged or extended.
Alternatively, if you are not the registered proprietor and you have lodged a caveat on the property that is being attacked then we can assist you in opposing an application to remove a caveat (if there are grounds for it).
* Please note we do not assist with the lodging of caveats as we typically refer that work out to property lawyers who work on the transactional side of matters. We only act on disputes*
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