Home » Property Law » What is a caveat and what does it mean?
What is a caveat and what does it mean?
Caveats are a crucial aspect of property law in New South Wales (NSW), serving as a protective measure for individuals or entities claiming an interest in a property. Here are some commonly asked questions about caveats in NSW:
1. What is a caveat?
A caveat is a legal notice lodged with the NSW Land Registry Services, indicating that someone other than the registered owner claims an interest in the property. It acts as a warning to third parties that the property is subject to this claimed interest and prevents any dealings (such as sale or transfer) from being registered without the caveator’s consent.
https://www.nswlrs.com.au/Titles-Dealings/Title-Information/Buying-Selling-Property-in-NSW/Caveat
2. Who can lodge a caveat?
Only individuals or entities with a “caveatable interest” can lodge a caveat. This means you must have a legal or equitable interest in the property, such as:
- Purchasers under a contract for sale.
- Lenders who have provided a loan secured by the property.
- Beneficiaries under a trust.
- Individuals who have contributed financially to the property’s purchase or improvement.
It’s important to note that simply being owed money by the property owner does not constitute a caveatable interest.
3. How do I lodge a caveat?
To lodge a caveat in NSW:
- Seek Legal Advice: Ensure you have a valid caveatable interest.
- Prepare the Caveat Form: Obtain and complete the appropriate form from NSW Land Registry Services.
- Lodge the Form: Submit the completed form electronically through an Electronic Lodgment Network Operator (ELNO) or via a solicitor or licensed conveyancer.
Incorrectly lodging a caveat can lead to legal consequences, so professional guidance is recommended.
4. Can a caveat be removed?
Yes, a caveat can be removed through:
- Withdrawal by the Caveator: The person who lodged the caveat can withdraw it at any time. https://rg-guidelines.nswlrs.com.au/e-dealings/elodgment/dealings_eligible_for_elodgment/withdrawal_of_caveat_electronic
- Lapsing: If the caveator does not take legal action to support their claim within a specified period after a lapsing notice is served, the caveat will lapse. https://rg-guidelines.nswlrs.com.au/land_dealings/dealing_requirements/caveats/lapsing_notice/lapsing_notice
- Court Order: An interested party can apply to the Supreme Court for an order to remove the caveat.
It’s advisable to consult legal counsel to navigate the removal process.
5. What are the consequences of lodging a caveat without a valid interest?
Lodging a caveat without a legitimate caveatable interest can result in:
- Legal Penalties: The caveator may be liable for compensation to any person who suffers a financial loss due to the improperly lodged caveat.
- Court Orders: The court may order the removal of the caveat and impose additional penalties.
Therefore, it’s crucial to ensure you have a valid interest before lodging a caveat.
Understanding the function and implications of caveats is essential for anyone involved in property transactions in NSW. At ALA Law we have extensive experience in lodging and lapsing caveats. Let our experienced team guide you in the right direction to assist you with his property matter.
