What is a caveat?

A caveat is lodged on the register of title to a property and prevents the property from being transferred to another owner. Literally, the meaning of caveat is ‘beware’. It serves as a warning to anyone considering buying the property or taking any other interest in the porperty that there may be a legal interest or claim over the property by a third party other than the owner. It is a form of statutory declaration under the Real Property Act 1900 (NSW). Often caveats are taken out in order to prevent someone from selling their property without paying a third party who is owed money such as a bank or another type of mortgagee. Sometimes in the case of an investment property they are also lodged by co-investors in property when they suspect that they will not be paid by their business partner.

How is a caveat removed?

There are a few ways that a caveat can be removed. It can be withdrawn using a form 08WX which can be signed by the person who lodged the caveat or their solicitor. It can also lapse which means that the caveatable interest in the property has lapsed. This is sometimes formalised using a lapsing notice. A Lapsing notice is form 08LX and can be submitted by the owner of the land. It can also be removed by the order of a court or the caveator can consent in writing to the registration of another dealing. However, it also needs to be noted that lodging a caveat without reasonable cause can mean that you are liable to pay compensation to person who suffers injury as a result of the lodging of the caveat which could be very substantial and professional legal advice should always be sought before taking such a step. If you have a query about caveats, please do not hesitate to contact us using any of the contact methods available on this site.