Property
7. Caveats
Authors: Staff Legal Eagle
Firm / Chambers:
Last updated: 12 Jul 2015
- A caveat is like a statutory injunction. That means an automatic bar that prevents something from being done. A caveat protects the holder of an unregistered interest in land by preventing the registration of any further interests that may affect the interest of the original caveator (the holder of an unregistered interest).
- A caveat must be in the approved form specifying:
- the name of the caveator;
- the address;
- the prescribed particulars of the legal or equitable estate or interest; and
- identify the property over which the caveat is lodged.
- Under section 74P of the Real Property Act 1900 (NSW) a caveator is liable to pay compensation to the landowner if they lodge a caveat without reasonable cause.
- ‘Reasonable cause’ means an honest and reasonable belief that the caveator has interest in a property.
- In Australia courts have indicated that a person who possesses a caveatable interest but lodges a caveat for an ulterior motive may not have reasonable cause.
- In some circumstances failure to get legal advice could also indicate that you had no reasonable cause.
- Compensation for wrongful lodgement of a caveat may be awarded in circumstances where the caveator was honest but his or her solicitor was negligent. A caveator must accept the risk of liability to compensate the registered proprietor for loss realistically attributable to the wrongful lodgement of caveat.
- One example may be where the caveator believes on legal advice they have a right to share in the property of a deceased estate. They may lodge a caveat to prevent the property being distributed before their claim is heard in court. They would need to have a very good claim because if they lose they will need to pay the costs of the court case for themselves and the other party as well as paying compensation for lodging the caveat if the court finds it was unreasonable for them to do so.
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