What is a Caveat In NSW?

A caveat is a legal instrument that can be lodged by a person who claims to have an interest in land (caveator). The caveat prohibits the recording of any dealing affecting the property to which the caveator claims to be entitled. For instance, if a caveat is lodged against the title of a property, that property cannot be mortgaged or sold until the caveat is dealt with and removed.

The caveat must be in the approved form and;

1. specify the name of the caveator,
2. the residential address of the caveator ,
3. the name and address of the owner of the property concerned,
4. the particulars of the interest, and
5. an address in Australia at which notices may be served on the caveator.

Upon the lodgement of a caveat, the Registrar-General must give notice in writing of the lodgement of the caveat to the owner of the property who is affected by the caveat.

If a caveator is served with a notice to remove the caveat, the caveator may prepare an application to the Supreme Court for an order extending the operation of the caveat. If the caveator does not do that, then the caveat will lapse and be removed.

However, it is important to note that a caveatable interest in property does not always arise even though you may think you have one. Below is a list of examples of non-caveatable interests:

1. A written acceptance of an offer to purchase land, without any exchange of contracts;
2. The right of a tenant to apply for relief from forfeiture;
3. An agreement between a borrower and a lender that the lender receives a share of profits on the sale of land purchased by means of a loan made to the borrower; and
4. An estate agent’s claim to commission.

Some examples of caveatable interests include, but are not limited to:

1. The interest of a purchaser under a contract for the sale of land;
2. A claim by a wife that land was purchased by her husband from money she had advanced for that purpose; and
3. A claim to an interest in the land as a result of having made a financial and non-financial contribution to the acquisition, conservation or improvement of the land.

If this article has prompted questions for you, and you wish to discuss whether or not you do in fact have a caveatable interest, please call our Property Team at Solari and Stock Lawyers.  You can reach our team of solicitors on 02 8525 2700 or click here to request an appointment.

Article by Suna Ozcan
Photo by R ARCHITECTURE on Unsplash