A caveat is a legal notice that is lodged with NSW Land Registry Services (“LRS”) over a specific property or land. The caveat is a notice that you are claiming to have an interest on the property and prevents any dealings being done with property (for example, a sale and transfer, without the consent of the person who lodged the caveat).
When can you lodge a caveat?
In theory, anyone can lodge a caveat. However, if there is no proper basis for it to be lodged then the owner of the property will generally apply to have it removed and the person who lodge the caveat may face negative costs implications.
For a caveat to be appropriately lodged, you must have a “caveatable interest” in that specific piece of land. It is not sufficient that the owner of the property owes you money or you are involved in a Family Law dispute with them and do not want them to sell the property until that dispute is resolved.
What is a caveatable interest?
Caveatable interests include:
- If the owner of the property has entered into an agreement with you to provide goods or services and grants you a charge over their real property as part of the agreement;
- Purchasers of a property under a contract of sale; and/or
- If the owner of the property is holding it on trust for your benefit.
How is a caveat removed?
If a caveat is lodged over property that you own, then you must be given notice that it has been lodged. If you think that there is no basis for it to have been lodged, you can apply to have it removed.
This is done by lodging a lapsing notice with the LRS and serving a copy on the person who lodge the caveat. The caveat will then lapse in twenty-one (21) days, unless they make an application to the Supreme Court of NSW for an order to extend the operation of the caveat.
If you are seeking to lodge a caveat, or a caveat has been lodged on a property you own and you are seeking to have it removed, please do not hesitate to get in touch with our property law team.