The word caveat simply means a warning or notice, and a caveat precisely does that.
A caveat serves notice to all the world that someone has an interest in a property alongside the interest of the registered owner of that property. The caveat will not only inform everyone that you have an interest in the property, but it will also prevent the registration of any dealing until the caveat has been removed.
If you are exchanging contracts for the purchase of a property or are thinking of purchasing a new property, it is advisable for you, as the purchaser, to lodge a caveat to protect your interests and to minimise the risks if the sale falls through.
In order to lodge a caveat, you must have a “caveatable interest” and this interest must be existing at the time that you lodge the caveat. Accordingly, the caveat can only be lodged after you have exchanged contracts to purchase a property.
It is important to ensure that you have a caveatable interest in a property before lodging a caveat as in NSW, pursuant to the Real Property Act, if you do not have a caveatable interest you may be liable to pay compensation for any loss you may have caused after lodgement.
You may be eligible to lodge a caveat if:
- You have purchased a property under a Contract for Sale of Land.
- You have sold a property under a Contract for Sale of Land but have not received the full amount of the purchase price.
- If you have a right of access to the land.
- If you are a creditor who wants to prevent the land from being sold.
- You are a tenant under an unregistered lease.
If you have a caveatable interest in a property, you must submit a signed form to the Land and Property Information Office (LPI) which sets out the details of the property that you claim to have an interest in, the details of the registered proprietor of the property and the nature of the interest you claim to have.
Contact us if you would like to discuss lodging a caveat on a property or if you would like to discuss any other aspect of Property Law.