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A caveat is a legal notice that is lodged against a property title to warn others that a third party has an interest in the property. The caveat is lodged with the Land Titles Office and it will appear on the property's certificate of title.
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A caveat is a legal notice that is lodged against a property title to prevent the property from being sold or transferred without the consent of the person who lodged the caveat. It does not confer ownership, but it does provide the interest holder with some protection.
Caveats are lodged under Section 89(1) of the Transfer of Land Act 1958 (Vic), which states that:
“Any person claiming any estate or interest in land under any unregistered instrument or dealing… may lodge with the Registrar a caveat…forbidding the registration of any person as transferee or proprietor of … any instrument affecting such…interest either absolutely or conditionally…”
The key words in this section are “claiming” and “interest”. This means that the person who lodges the caveat does not need to have legal ownership of the property, but they must have some kind of interest in it. This could be a mortgage, a lease, or a contract to be given the property in the future.
Caveats can be a useful way to protect your interests in property. However, it is important to speak to a conveyancer or property to make sure that you are lodging the caveat correctly.
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Lodging a caveat does not give the caveator any priority over the interest noted in the caveat. The purpose of a caveat is to simply notify the Registrar of a claim and to allow the caveator to be notified of any dealings with the property.
Section 91(1) of the Transfer of Land Act 1958 (Vic) states that as long as a caveat remains in force, the Registrar will not record any change in proprietorship or any dealing that affects the interest in respect of which the caveat is lodged.
Therefore, lodging a caveat prevents any further dealings with the property without the caveator’s knowledge.
Here are some additional things to keep in mind about the effect of lodging a caveat:
If you are considering lodging a caveat, it is important to speak to a lawyer to make sure that you understand the implications.
Caveatable interests are interests in land that can be protected by a caveat. The following are some examples of caveatable interests:
A caveat should not be used as an injunction by a person who does not have a legitimate interest in the property. Using a caveat as an injunction without a legitimate interest can result in the caveator being ordered to pay compensation or costs. A mere contractual or personal right does not give rise to a caveatable interest unless it is coupled with the granting of a relevant interest in the land.
Whether or not a caveator has “an estate or interest in land” is a matter that must be determined by considering the facts of each particular case. While the Transfer of Land Act does not define “estate or interest in land,” there are grounds for claims that have been held by courts to constitute “an estate or interest in land.”
Here are some examples of when you should not lodge a caveat:
If you are unsure whether or not you should lodge a caveat, you should speak to a lawyer.
Section 53 of the Property Law Act requires all estates or interests on land to be created or disposed of in writing. However, a caveatable interest may exist even when there is no documentary evidence. Some common examples of grounds of claim for a caveatable interest include:
Some interests in land, such as an unregistered mortgage, are relatively easy to establish. However, other claims, such as alleged constructive trusts, may require further evidence of the circumstances of the alleged trust interest. This evidence may include the conduct of the parties, any discussions held, any documentary evidence and monetary contributions.
If you are not familiar with the conveyancing process, it is important to seek professional advice from a conveyancer or solicitor.
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