What is a caveat? And how does it affect land ownership in Australia?

by The FindLaw Team

Australians are understandably fiercely protective about land ownership, and the Torrens system is a reflection of the value attached to property. The primary purpose of Torrens is to provide certainty in relation to title, but what about unregistered interests in land, referred to as caveats?
 

What effect does a caveat have on land?

The operation of a caveat, acts as an injunction to the Registrar in the restraining of any registering dealings with the land without the caveator’s consent. However, in jurisdictions where a caveator can consent to the registration of a dealing, such as Victoria, the caveat may not lapse, as stated in s 90(1)(b) of the Transfer of Land Act 1958 (Vic) for example.

Registered dealings where a caveator has consented, and there is no evidence of fraud or an agreement to the contrary, the interest that is registered will not be subject to an interest claimed by a caveator. However, some interests will not be overridden by registration and will still remain after registration, even if the land is ‘protected’ by a caveat. It should be highlighted however, that the laws associated with caveats can differ between the jurisdictions.

Can caveats be noted by the Registrar?

There is no requirement in all jurisdictions for the Registrar to note the caveat on the register. However, caveats can be registered, and the notation in the register has the effect of giving notice to the world of the caveator’s interest in the land, while also providing direction to the Registrar. Additionally, the Registrar may be restrained from any dealings prohibited by the caveat, until the caveator has been given the opportunity to establish their clam to the land. However, the Registrar may provide notice to the registered proprietor that a caveat has been lodged.

Can a dealing still be registered even if there is a caveat in place?

The Registrar may not be able to register dealings that affect the estate or interest of the caveator, although, there may be some exceptions. Matters such as registration of transmissions, vesting orders, discharges of mortgages, and transfers pursuant to writs may be some examples of exceptions. Furthermore, some jurisdictions make an allowance for ‘permissive’ or ‘conditional’ caveats.
 

What may be the effect of a dealing for registration that has been lodged to the Registrar?

Generally, a dealing lodged for registration may not be able to go ahead to register if there is a caveat in place restraining the registration of the dealing on the title.

There may be some notification requirements to the caveator that a dealing has been lodged for registration. Depending on the jurisdiction, a caveator has between 14 to 30 days to agree to the registration of the dealing, or to commence proceedings to establish the right for the caveat to be maintained – or the caveat may lapse.

If a caveat is defective in form, it may not be considered. Alternatively, if an extension has been granted, the court will allow for a period of time to ensure the matter can be appropriately dealt with.   




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