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The word “caveat” is Latin for “let him beware”, and that is the purpose of a caveat in land dealings. It is to put third parties on notice that there is a claim to an interest in the property.

The Gold Coast property lawyers at QBM Lawyers have expertise in caveats and when they should be used. They will advise of the risks of the use of caveats – which can result in a compensation claim if they are not lodged with reasonable cause – and the benefits of them which can ensure that your rights to a property are not lost.

Caveats are commonly lodged against the title to property if the owner has granted a charge in favour of the caveator – often under a supply or finance agreement – or has agreed to some other dealing by which a third party has an interest in the land.  This can include long term sale contracts, where the buyer’s rights will not be protected by a Priority Notice, and options to purchase.

There are complications to the use of caveats which are essentially seen as a temporary measure to prevent land being dealt with contrary to the interest claimed by the caveat, and will usually only remain effective for three months after lodgement.

Examples of these complexities in Queensland include:

  • That a caveat claiming an interest in a lot as a buyer under a contract (eg a long-term contract) will last a maximum of 3 months unless it is accompanied by a consent from the owner at the time of lodgement, in which case it continues until withdrawn or removed;
  • A caveat claiming an interest in a lot to secure a sum of money (such as from a lender to a borrower) will only last a maximum of 3 months regardless of whether it is accompanied by a consent from the owner. Many lenders do not appreciate this and accept a consent caveat as security, when it is worthless after three months from lodgement;
  • Caveats lodged by the owners do not usually lapse at all;
  • If the titles office is provided notice of the commencement of an action to establish the claim made in the caveat in an appropriate court before the expiry of the caveat, the caveat will usually not lapse;
  • An owner can – when receiving notice of the caveat being lodged – give notice to the caveator to commence an action in an appropriate court to establish the claim in the caveat in which case the action has to be commenced and notified within a short period of time otherwise the caveat will be removed. As an alternative the owner can start its own action in the Supreme Court to remove the caveat;
  • A second caveat cannot be lodged on the same grounds.

As a result of these complexities and risks, it is important to seek advice from a property lawyer with experience in litigation before attempting to lodge a caveat. Our Gold Coast property lawyers can provide that advice.

If you would like to discuss lodging a caveat or how to remove one, please contact Peter Muller on 07 5574 0111 or peterm@qbmlaw.com.au or Megan Hanneman at meganh@qbmlaw.com.au

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