What is a caveat?
A caveat is a notice recorded on a title to land to protect an interest that affects that title. The caveat forbids registration of any further interests that may affect the interest recorded in the caveat without the consent of the caveator (the person who lodges the caveat).
Each state and territory has its own legislation governing caveats. In Western Australia, that legislation is the Transfer of Land Act 1893 (TLA).
Do I have a caveatable interest?
A caveat may be lodged to protect a legal or equitable interest in land. Caveats are essentially “warnings” that a party has an unregistered interest in the subject land. To have a “caveatable” interest you must have a claim to a legal or equitable interest in land.
Caveatable interests include (but are not limited to) an interest:
- under an option to purchase;
- as a tenant of the land;
- as purchaser under an agreement for sale; and
- as an equitable mortgagee.
Interests that do not usually constitute a caveatable interest include (but are not limited to):
- an unsecured claim for a debt or for damages (including rights as a judgment creditor);
- a right of pre-emption (to purchase, lease or otherwise acquire an interest in the land);
- an interest as builder under a construction contract in relation to the land (unless, as is often the case, the building contract also grants the builder a charge over the land).
A caveator must ensure that they have a caveatable interest in the land before lodging a caveat as a caveator may be liable in damages for lodging or refusing to withdraw a caveat without reasonable cause.
For a caveat to be successfully lodged, it must comply with the requirements specified under relevant legislation.
In Western Australia, three types of caveat can be registered:
- an absolute caveat, which prevents any subsequent dealing being registered;
- a subject to claim caveat, which prevents any subsequent dealing being registered unless the dealing is expressed to be subject to the caveator’s claim; and
- a notice caveat, which prevents any subsequent dealing being registered until after notice of the intended registration or dealing is given to the caveator (this type of caveat is rarely used).
How can I remove a caveat?
There are several ways that a caveat can be removed. The most common way is by an application to Landgate for the removal of a caveat under section 138B of the TLA (Note: this procedure is not available in every situation). After the application has been lodged at Landgate, and accepted, Landgate will serve the caveator with a notice requiring that the caveator, within 21 days, withdraw the caveat or obtain from the Supreme Court an order extending the operation of the caveat.
If the caveator fails to obtain a Court Order extending the operation of the caveat within the 21 day period, the caveat will lapse and be removed from the property’s title. Once a caveat has been removed under section 138B of the TLA (by lapsing or being withdrawn) the caveator will not be able to re-lodge the caveat unless the caveator obtains leave of the Court or the consent of the registered proprietor.
How do I withdraw a caveat?
After lodgement of a caveat, applications for its withdrawal can be made by the caveator at any time. In Western Australia, a withdrawal of caveat must (subject to limited exceptions) be signed by the caveator.
Fletcher Law has lawyers experienced in all property matters, including the preparation, lodgement, removal and withdrawal of caveats. If you require assistance regarding a caveat or other property matter, please contact us.