- What does a caveat on a property mean?
- Who can lodge a caveat?
- When should a caveat be lodged?
- How much does it cost to put a caveat on a property?
- Can a property be sold if it has a caveat?
If you’re buying or selling a house, you’ve most likely come across the term, “caveat on property”. But what does it mean and how does it impact you as the purchaser or vendor? Below, we’ve outlined everything you need to know about a caveat on a house; but if you have any questions, please don’t hesitate to speak to our conveyancing team.
What does a caveat on a property mean?
A caveat is a form of statutory injunction provided for under the Real Property Act 1900. It acts as a warning or notice to the public that there is an interest on the land/property for a particular reason, and it can therefore not be sold to another purchaser unless the caveat is lifted.
Who can lodge a caveat?
The most common reason a caveat on property is lodged is when contracts have been exchanged on property but the property has not yet been settled. The purchaser acquires what is known as a “caveatable interest”. This means that the purchaser is entitled to register a caveat to protect that interest.
Other people who can lodge a caveat are buyers who have signed a contract to buy the same property. This can happen by mistake if two real estate agents sell the property to different purchasers. In this instance, the person who lodges the caveat first may have a principal claim to the estate.
A bank lender may also lodge a caveat on a purchaser’s behalf to prevent the vendor from selling the property. A creditor may have a written agreement with the vendor that allows the creditor to lodge a caveat to secure a loan. Alternatively, the creditor may have a court order allowing for the lodging of a caveat.
Please note: if you lodge a caveat without reasonable cause, you are liable to pay compensation to any person who suffers a financial loss as a result. This is why it’s best to speak to an experienced property lawyer about lodging a caveat on property.
When should a caveat be lodged?
You should consider lodging a caveat if you have an estate or interest in land that you cannot protect by registration of some other dealing, for example, a transfer or mortgage. This will safeguard you and provide protection against the property being sold to another purchaser.
A caveat should ideally be lodged by the lawyer or mortgage lender when an offer has been formally accepted by a vendor in writing and the contract of sale has been exchanged. This should occur before the Certificate of Title and the Transfer of Land has been obtained to avoid another purchaser gaining priority over the purchaser.
How much does it cost to put a caveat on a property?
Answer: how long is a piece of string? There can be many associated costs with placing and removing a caveat on a property, including PEXA fees and solicitor fees. We would encourage you to speak with Owen Hodge Conveyancers to get a clearer understanding about the costs of putting a caveat on a property.
Speak to Owen Hodge
If you need advice on lodging a caveat on property (NSW), or on anything relating to selling or buying a house, speak to our property law team. We will provide you with more information about lodgement of caveats and ensure that the purchase or sale of your house runs smoothly.
Caveat on property FAQs
Can a property be sold if it has a caveat?
No, once a caveat has been successfully lodged, the property will not be able to be sold unless the caveat is withdrawn by the caveator.
How long does a caveat on a house last for?
The caveat will lapse 21 days after service of the Notice unless the caveator obtains and lodges with NSW Land Registry Service an order to extend the operation of the caveat.
How to remove a caveat on your property
Speak with your solicitor in the first instance, however the two key ways are:
- Lodge a Withdrawal of Caveat form or
- Lodge an order of the Supreme Court