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Protect your interest in a property

A caveat is a statutory injunction that prevents the registration of dealings and plans on a title, provided for under the Real Property Act 1900. A caveat operates as a warning on a land title to others by noting a person or organisation’s interest in land or property.

Only those with an eligible interest in the land can record a caveat on title. If you lodge a caveat without 'reasonable cause', you may be liable to pay compensation to any person who suffers a pecuniary loss as a result. The party that records a caveat on title is known as the “caveator”.

We recommend that parties always seek legal advice before lodging a caveat.

Once a caveat is recorded it must be removed, or the caveator's written consent obtained, before any new dealings can be registered relating to the property.

 

Benefits offered by caveats

• For unencumbered land, caveats can provide an additional layer of fraud prevention by preventing lodgments on the title by other parties.
• Increased protection for property buyers during long settlements by recording their interest in the property on title before it is transferred to them.
• Property owners gain longer term protection. Unlike priority notices, a caveat remains on title until it lapses, is removed by court order, is formally withdrawn, or when the interest in the caveat is satisfied by the registration of a subsequent dealing or plan.

 

Common uses of caveats

Caveats may be lodged to:

• Prevent the registration of an incoming interest or dealing by other parties. Owners of unencumbered land may use a caveat on their land or estate when it is not protected by other dealings like a mortgage.
• Protect an interest under a contract for sale (purchaser’s caveat).
• Secure a loan. A bank or other lender can place a caveat on title to make others aware of their financial interest in the property.
• Protect an interest such as a lease or mortgage.
• Registration of a delimitation plan.

 

How to lodge a caveat

We recommend that parties always seek legal advice before lodging a caveat.

Step 1 : Engage a solicitor or conveyancer to prepare a caveat for electronic lodgment, or download and complete the caveat form and relevant exception form in hard copy.

Step 2: Lodge caveat and relevant exception form, electronically through your solicitor or conveyancer, ensuring fees are paid.

Step 3: NSW LRS examines the documentation provided. Particulars of the estate or interest claimed must be set out. In addition, details of any instrument and/or facts that support the claim must be stated.

Step 4 : The Register is updated to record the lodgment of the caveat if it meets the lodgment requirements. Once processed, the caveat is recorded against the title on the Register.

Step 5 : NSW LRS provides notice of the caveat back to the applicant and also sends a notice to the registered proprietor of title if they are not the caveator.

 

NSW LRS’s role with caveats

NSW LRS is responsible for maintaining records related to land and property title and does not have the legal authority to ensure a caveator is entitled to the particular estate or interest claimed, as set out in section 74Q of the Real Property Act 1900. NSW LRS cannot prevent a caveat being lodged if it meets the lodgment requirements.

NSW LRS can refuse to accept a caveat for lodgment for the following reasons:

• Reference to title is incorrect; or
• Reference to title is not supplied; or
• The full name(s) and address(es) of the registered proprietor(s) has been omitted from the caveat or the name(s) do not match the Register
• When presented in paper form without an accompanying exception form, as caveats are mandated for electronic lodgment.

 

How a caveat appears on title

A recorded caveat appears in the second schedule on a Folio of the Register. Below is an example showing a caveat on a Folio highlighted in yellow (highlighting added).

 

Removing a caveat on a property title

If there is a caveat on your title that you think is unreasonable, we recommend you seek legal advice.
There are several ways to manage or remove caveats that are recorded on a title, including:
1.  Order of Court
2. The caveat lapses
3. Withdrawal
4. Obtaining caveator's consent

1. Order of Court

An objection to a caveat is a matter for resolution between the parties involved or through legal proceedings in the Supreme Court.

The Supreme Court can make a ruling to extend or remove a caveat as it deems appropriate. After a judgement is made regarding a caveat, NSW LRS will then take action to extend, withdraw or remove the caveat in accordance with the Orders of Court at the direction of the lodging party.

For more information, speak with your legal advisor or visit the Registrar General’s Guidelines on caveats .

2. The caveat lapses

A caveat lapses when:

• the interest claimed under the caveat is satisfied by the registration of another dealing; or
• An Application for Preparation of Lapsing Notice (form 08LX), is lodged with NSW LRS by the registered proprietor of the land or a registered interest.
• For more information, speak with your legal advisor or visit the Registrar General’s Guidelines on lapsing notice

3. Withdrawal

A caveat can be withdrawn by:

• lodging a Withdrawal of Caveat (form 08WX) signed by the caveator or their solicitor with NSW LRS; or
• an order of  the Supreme Court annexed to a Request (form 11R) and lodged (by hand) with NSW LRS.

For more information, speak with your legal advisor or visit the Registrar General’s Guidelines on withdrawal of a caveat.

4. Obtaining the caveator's consent

A caveator may not want their caveat removed but may not object to the lodgment and registration of a dealing or plan. For example, a caveator claiming as an unregistered mortgagee may not object to a lease being granted over the property. In these cases, the caveator can give written consent to allow registration of the subsequent dealing.

When the caveator consents to the registration of a dealing, they also consent to the exercise of any powers that the owner of that interest may gain by registration. For example, where a caveator has consented to the registration of a mortgage, the caveat will not prevent the mortgagee from exercising the power of sale under the mortgage.

When a caveator consents to the registration of a dealing that is prevented by the caveat, the consent must:

• be in writing attached to the dealing; and
• state the full name of the caveator; and
• state the registered number of the caveat; and
• state the type of dealing and the name of the party/parties to which the consent refers; and
• be absolute; any qualification or contingency to the consent is unacceptable; and
• be signed by the caveator or any person authorised to sign a withdrawal of caveat; and
• have the signature of the caveator witnessed if signed by a private party or where the consent is not on a letterhead.

For more information, speak with your legal advisor or visit the Registrar General’s Guidelines on caveat consent.

 Find out more

For more information, visit the RG's Guidelines on caveats or contact your solicitor or conveyancer.