In brief - You need a caveatable interest in property in order
to lodge a caveat
There is legislation in the Australian states and territories
regulating the systems for lodging caveats.
What is a caveat?
One of the first things I remember learning at law school is
"caveat emptor" - "buyer beware".
And caveats do just that - they are essentially red flags that
serve as a warning sign for potential purchasers of a property that
someone out there is claiming an interest in a property.
The legislation which regulates the systems for lodging caveats
in the different Australian states is set out at the end of this
When can you lodge a caveat?
One of the questions that I get frequently from clients is
"Can I lodge a caveat?" More often than not, clients ask
this question when someone owes them money.
Unfortunately, you cannot lodge a caveat whenever you feel you
have been wronged. In fact, there are penalties for lodging a
caveat without reasonable cause. In order to lodge a caveat, you
must have what is known as a "caveatable interest".
A caveatable interest means that a person has a current legal or
equitable interest in land. Examples include:
Purchasers of a property under a Contract for Sale of Land
Agreements with a customer for the sale of goods or the
provision of services, and the agreement includes a clause whereby,
as security for obligations under the agreement, the customer
charges all of its legal and equitable interest (both present and
future) of whatsoever nature held in any and all Real Property
This is not by any means an exhaustive list.
It is possible to exclude a right to lodge a caveat. For
example, a Contract for Sale of Land may include a Special
Condition that specifically removes the purchaser's right to
lodge a caveat.
The interest which is claimed to give rise to the right to lodge
a caveat must exist at the time of lodging the caveat, that is, it
cannot be an interest that can only arise in the future.
How do you lodge a caveat?
In NSW, the Land and Property Information Office (LPI) provides
the form which you must fill in and lodge.
The form requires you to set out:
The details of the property that you claim to have an interest
The details of the registered proprietor of the property
The nature of the interest that you claim to have and how it
The form must be signed and your signature witnessed. The
document is in the form of a statutory declaration. There are
serious consequences for signing a false declaration. You should
always speak to your legal advisor before lodging a caveat.
Upon paying the relevant filing fee, the caveat will be lodged
at the LPI. Once lodged, the caveat will show on the title for the
property for all the world to see.
How can you challenge a caveat?
There are a number of ways that a caveat can be removed. The
most common way that I have come across is through a Lapsing
Notice. A Lapsing Notice is issued by the owner of the property and
then served on the person/party who has lodged the caveat (known as
The caveator has 21 days from the date of service to seek an
order from the Supreme Court of NSW for an order extending the
operation of the caveat. If an order is granted, it must be lodged
with the LPI before the 21 day period is up.
If no steps are taken by the caveator before 21 days are up, the
caveat will lapse, that is, it will fall off the title.
Legislation governing caveats in Australian states and
Warranties can be risk-shifting mechanisms when the party giving the warranty is not the party at fault for the defect.
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