Definition of Caveats
What is a caveat? The word caveat is the Latin meaning for “warning” or “beware”. In real estate matters, a caveat appears on the Landgate register means that there is a pending claim against a property by a person other than the owner!
It is important to recognize that a caveat does no more than ensuring that the public (and the owner of the property) is made aware of the existence of a claim against the property.
It does not necessarily mean that the title of the property is defective, or that the owner does not have the right to sell the property.
Removal of Caveats
However, the owner will not be able to sell the property unless the caveat is removed. The removal of the caveat can take place at the actual settlement of the sale of a property. This is fairly common.
From the owner’s point of view, a caveat can be removed voluntarily or involuntarily. If the owner contacts the person who lodged the caveat (the caveator), then the caveator might agree to remove their caveat. If so, they would prepare and sign a “Withdrawal of caveat” form (which is available on the Landgate website). There is some time involved in completing the process. The result is that the reference to the caveat is recorded as “withdrawn”. This occurs after the withdrawal form has been lodged (and accepted) by Landgate.
If the caveator refuses to remove their caveat, then the owner can contact Landgate and request that they send a “21-day” notice to the caveator. If the caveator has not obtained a Court order for the caveat to be extended, then it is removed by Landgate after the expiry of that 21-day period.
Importantly, the owner and the caveator must both realise that the caveat is simply a “warning” of the claim against the property. It does not comprise the claim itself.
Legal Steps When Dealing with Caveats
In other words, steps must be taken to start legal action in the correct Court to determine whether the claim is valid or not.
If there is an undue delay in this step is taken, then there is a risk that the Court will be more likely to remove the caveat. This can happen whether it is the owner or the caveator that eventually brings the claim to Court.
If a caveat is lodged without any proper foundation, then the caveator may be liable to pay compensation to the owner once the caveat is removed. If the caveat has delayed the sale of the property (or possibly even caused the sale to “fall through”), the payable compensation can be substantial.
Our firm is familiar with the procedures concerning the lodgment and removal of caveats. Importantly, we are familiar with the grounds upon which a caveat can properly be based.
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