A caveat is a notice recorded on a land title that warns the world someone claims an interest in the property. It is a common tool in Australian property law, yet many owners only learn about caveats when one appears on their own title. Buyers, lenders and family members can all have reasons to lodge one. Owners need to know what it means and how it can be removed.
This article explains caveats in plain language. It draws on guidance from the land titles offices in New South Wales and Western Australia. The rules in other states and territories follow similar ideas but differ in the detail. Always check the rules for the state where the land sits.
What a caveat actually does
In New South Wales, a caveat is described as a statutory injunction under the Real Property Act 1900. It records a claim to an estate or interest in land. The person who lodges it is called the caveator. NSW Land Registry Services explains this on its page about what a caveat is and how it works.
The main effect of a caveat is to stop the registration of dealings on the title. That means the owner generally cannot register a sale, a new mortgage or other changes while it is in place. There are some exceptions set by law and some dealings the caveat itself permits. In practice, a caveat can bring a sale or refinance to a halt.
Who can lodge a caveat
Only a person who claims an eligible estate or interest in the land can record a caveat. This is often called a caveatable interest. In New South Wales a caveat must be lodged through a subscriber, which is usually a lawyer or a licensed conveyancer. NSW Land Registry Services recommends getting legal advice before lodging one.
NSW Land Registry Services gives several examples of interests that may support a caveat. Common ones include a buyer’s interest under a contract for sale and a lender’s financial interest. An unregistered lease or mortgage can also qualify. So can a beneficial interest in a trust.
Caveats often come up when people who own property together fall out. A company or business dispute can lead to arguments over who owns what. Our article on disputes between company directors looks at how those conflicts can unfold. Where land is part of the dispute, a caveat may be one of the first steps someone takes.
The land titles office does not check the claim
Many owners are surprised that a caveat can go on their title without anyone checking the claim. In New South Wales, the land registry does not have to be satisfied that the caveator is entitled to the interest claimed. It cannot refuse a caveat that meets the lodgement requirements. It must send notice of the caveat to the affected registered owners at the address on the caveat.
That does not mean anyone can lodge a caveat without risk. If a caveat is lodged without reasonable cause, the caveator may have to pay compensation for any money the owner loses as a result. A court can also order a caveator to pay compensation to a person who suffered financial loss. This is a strong reason to get proper advice before lodging one.
How a caveat can be removed in New South Wales
The simplest way is for the caveator to withdraw it. A subscriber lodges a Withdrawal of Caveat form with NSW Land Registry Services. A caveat can also lapse once the interest it protects is satisfied, for example when another dealing is registered. Often the owner and caveator can resolve the issue by talking it through.
If the caveator will not withdraw, the registered owner can use a lapsing process. A subscriber acting for the owner lodges a lapsing application, and a lapsing notice is served on the caveator. The caveat lapses once 21 days pass from proper service of that notice. The caveator can stop this only by lodging a Supreme Court order extending the caveat.
Where removal is urgent, an owner can ask the Supreme Court for an order. A sealed copy of the order is then lodged with the registry. Being served with legal papers can feel confronting, much like the experience covered in our article on being served with a restraining order. Acting quickly and getting advice early usually helps.
How a caveat can be removed in Western Australia
Western Australia uses the Transfer of Land Act 1893, and Landgate is the land titles office. Its guide on removing a caveat in Western Australia sets out several pathways. A caveator can withdraw by lodging a Withdrawal of Caveat form. Since 1 December 2018, eligible withdrawals on their own must be lodged electronically.
Under section 138B, the registered owner can apply and the caveator is served with notice. The caveator then has 21 days to get a Supreme Court order extending the caveat, or it lapses. The 21 days runs from the date of service, not the date of lodgement. After a caveat is removed this way, the caveator cannot lodge another without leave of the court or the owner’s consent.
There are also 14 day notice processes in Western Australia. Under section 138, a caveat can lapse to the extent needed to register a particular instrument. Under section 141A, an owner can apply on the basis that the caveator’s interest has ended. The owner can also apply to the court for an order removing the caveat.
Consent and other options
A caveat does not always have to come off for a deal to proceed. In New South Wales, the caveator can give written consent to a later dealing being registered. The caveat stays on the title, and a note of consent is recorded. For example, a lender can still use its power of sale despite the caveat.
Many caveat disputes end with a negotiated outcome rather than a court hearing. Our article with tips for negotiating the best outcome may help if you are trying to reach a settlement. Taking a dispute to court costs time and money for both sides. Our article on how to avoid court proceedings looks at keeping a dispute out of court in a different setting.
Frequently asked questions
Can I sell my home if there is a caveat on the title?
A caveat generally stops dealings such as a transfer being registered. You may need the caveator to withdraw the caveat or consent to the sale. If they will not, there are lapsing and court processes that can remove it.
How long does a caveat last?
A caveat can stay on a title until it is withdrawn, lapses or is removed by a court. In New South Wales and Western Australia, an owner can start a process that gives the caveator 21 days to get a court order. If no order is obtained, the caveat lapses.
Can someone lodge a caveat just because I owe them money?
A caveat needs a claim to an estate or interest in the land itself. A lender’s financial interest can qualify in some cases, such as where land has been offered as security. A simple unpaid debt with no link to the land may not be enough, so legal advice is wise.
This article is general information about caveats in Australia and is not legal advice. Laws and processes differ between states and territories and change over time. Please speak with a qualified property lawyer about your own situation.