Who can lodge a caveat?
A caveat is a formal notice or warning lodged against the title of a property, which stops any person including the registered proprietor (owner) from dealing with the property.
The purpose of a caveat is to preserve and protect the rights of the caveator (the person lodging the caveat). The effect of a caveat is that any person intending to deal with the property against which a caveat has been lodged will be unable to do so without first notifying the caveator.
Any person claiming an estate or interest in land can lodge a caveat. The following interests are typical examples of interests which will support lodgement of a caveat:
- Purchaser under a contract for sale of land.
- Grantee of an option to purchase land.
- Tenant of the land.
- Mortgagee or equitable mortgagee.
- Chargee of the land.
- Holder of an unregistered instrument in relation to the land.
- Party benefitted by an easement or restrictive covenant in relation to the land.
An owner of land may lodge a caveat against his own land:
- to protect his/her interest in the land. This is called a registered proprietor’s caveat; or
- to prevent improper dealings in land.
There are certain interests that will not constitute a caveatable interest. A caveat must relate directly to an existing, identifiable interest.
Does a debt allow you to lodge a caveat and in what circumstances?
A question commonly asked in relation to caveats is under what circumstances a caveat can be lodged for non-payment of a debt.
In order to be able to lodge a caveat for non-payment of a debt the owner of the land must consent to a charge over the land as security for the payment of the debt. The consent is usually in the form of a charging clause in the debt or security agreement.
A debt arising from a loan given to the owner of the land for the purchase of the land or improvements to the land may give rise to a caveatable interest and allow for the lodgement of a caveat.
What happens if you improperly lodge a caveat?
It is important to note that the acceptance of a caveat at lodgement does not mean the caveat is valid. Landgate (the land titles authority in Western Australia) will generally accept and process a caveat if it is in the correct form and properly describes the interest being claimed.
In the event a caveator lodges a caveat and does not in fact have a caveatable interest, they can be ordered to pay compensation for damage to the registered proprietor.
How is a caveat withdrawn
There are a number of ways a caveat can be withdrawn ranging from a simple withdrawal to an order of the court. Two of the most commonly used methods for withdrawing a caveat are:
- Withdrawal of caveat document – used to remove standard caveats where the person who lodged the caveat (caveator) is available to sign the withdrawal.
- Application for the lapsing of the caveat – also known as a 14 or 21 day notice. This is commonly used where the caveator cannot be located and gives the caveator 21 days within which to obtain a Supreme Court order substantiating the caveat, failing which it will lapse.
If you are considering lodging a caveat but don’t know whether you have a caveatable interest, or if you need assistance in removing a caveat we have experienced lawyers who can assist you.
Contact our Property Law team today on 9476 4499 or email us via our CONTACT page.