Navigating Caveats in Property Transactions

30th May, 2024

What is a caveat?

Under the Real Property Act 1900 (NSW), a caveat serves as a public notice of interest in a property. Once a caveat is lodged, the property cannot be sold to another party unless the caveat has been removed. This differs from a priority notice which will be in effect for 60 days, with an allowed extension period of 30 days.


Who can lodge a caveat?

To be able to lodge a caveat, one must have what’s known as ‘caveatable interest’. For example, a caveat on a property can be lodged when contracts have been exchanged, but not settled. In this circumstance, the purchaser acquires “caveatable interest’ granting the purchaser to safeguard this interest. A bank lender can also lodge a caveat on a borrower’s behalf to prevent the sale of a property.

Those with contractual agreements over a property, such as lease agreements, are also eligible to lodge a caveat to protect their rights from infringement by other parties. It is crucial to note that lodging a caveat without reasonable cause can lead to financial liability, this is why is it important to consult Bangalow Conveyancing (CAL) first.


How is it lodged?

In New South Wales, a caveat is electronically lodged online with the Land Registry Services, typically on a platform such as PEXA. This form requires the title reference for the land, the complete names of the registered owners, the details regarding the caveatable interest, and the facts on which the claim is based on, for example, providing a fully executed contract for sale.


What happens next?

A caveat generally lasts 21 days from when the Notice is served, unless the caveator lodges an extension with NSW Land Registry Service.

A caveat will be removed when:

-the caveator officially withdraws the caveat

-a court orders for the removal of the caveat

-the interest in the caveat is satisfied by the registration of a future dealing

-it expires.

The two main methods to remove a caveat are to lodge a Withdrawal of Caveat form or to lodge an order of the Supreme Court.


Call Castrikum Adams Legal on (02) 66871167 with any questions about caveats or priority notices!