What is a caveat?
A caveat ( from the Latin word for 'beware') is a warning or caution. Where a person has an unregistered interest in real estate a caveat can be lodged to give notice of their interest and to prevent any further dealings with a property until the interest can be registered. In any dealings with land, registered interests are given priority over unregistered interests so a caveat is required to give the person affected notice of any dealings with the land in question and time to formalise their interests.
Only interests connected to the land can be the subject of a caveat
When lodging a caveat the interest claimed must attach to the land. Interests that commonly are the subject of a caveat are unregistered mortgages or leases or equitable interests in the property. An example of an equitable interest is where a couple purchase a property together but the title is in the name of one spouse only.
If a person is seeking to enforce an interest unconnected with the land itself, such as recovery of a debt, a caveat is not the appropriate remedy. An order can be obtained from the Court to charge the property with the judgment debt, known as a charging order, but this is not the same as a caveat. Legal advice needs to be sought regarding preparing an application to the Court for a charging order, and the steps required to register the judgment and then discharge the order once the debt is paid.
Types of caveats
An absolute caveat will not allow any subsequent registrations of interests.
A permissive caveat will allow further registrations if they are made subject to the caveator’s (the person who lodged the caveat) claim. Some permissive caveats require any further dealings to obtain the caveator’s written consent.
Removing a caveat
If the caveatee (the person against whom the caveat is directed) objects to the caveat, an application can be made to the Registrar General for its removal [see Real Property Act 1886 s 191(e)].
The Registrar General will send a notice to the caveator giving 21 days notice of his intention to remove the caveat. If the caveator wants the caveat to remain he or she must make an urgent application to the Supreme Court within 21 days from the date of the notice (so it will be less than 21 days allowing for postage).
If the Court is persuaded that there is an arguable case to keep the caveat, and that there is not some other remedy available to the caveator, the Court can make an order to extend the time for removal of the caveat until such time as any dispute about the caveat can be resolved. This may be by way of negotiation or after a trial. The sealed order of the Court extending the time for removal must be given to the Registrar General before the caveat lapses. There are significant costs involved in this process, and legal advice needs to be sought to ensure that there are proper grounds to keep the caveat. A legal practitioner is best placed to give advice regarding specific situations, and if required, prepare the Court documents.
In certain circumstances, for example, if the caveat has been lodged by a beneficiary under a will or by the Registrar General, an application for removal cannot be made.
Liability for lodging a caveat unnecessarily
Where a caveator has lodged a caveat unnecessarily they may be liable to pay compensation [see s 191(j)].
Lodging a further caveat
No further caveat can be lodged by the same person in relation to an interest previously the subject of a caveat without a Court order [see s 191(k)].
The Lands Titles Office is unable to assist in preparation of caveats and related documents.
It is very important to get professional advice from a legal practitioner or conveyancer regarding a caveat before acting to ensure that the document is properly worded and completed. In addition, any warning to remove a caveat should be acted on immediately because once it lapses the opportunity may be lost to protect an interest in real property.
Forms and guidance notes are available on the sa.gov.au website.
The content of the Law Handbook is made available as a public service for information purposes only and should not be relied upon as a substitute for legal advice. See Disclaimer for details. For free and confidential legal advice in South Australia call 1300 366 424.