Entering a Caveat and How It Is Removed

Caveats are often misunderstood as a way of stopping someone else from owning land. In fact they are a protective holding mechanism: they freeze registration so that a person’s interest is not lost while a dispute or transaction is resolved.

The effect of a caveat

While a caveat exists, registration of dealings in that land is blocked. That means a transfer cannot be registered even where the full price has been paid. For a buyer this is a real risk: you may have paid and still be unable to become the registered proprietor.

When caveats commonly arise

• A buyer protecting an interest under a sale and purchase agreement
• Estate disputes between beneficiaries
• Matrimonial disputes involving property
• Creditors claiming an interest in the land
• Disputes between partners or trustees

The stages of entering a caveat

• Assess eligibility. Establishing whether you hold a caveatable interest. This is a legal assessment, not simply a sense of entitlement.
• Title search. Confirm the title particulars and the current registered proprietor.
• Prepare documents. The form and supporting affidavit setting out the basis of the interest.
• Entry. Documents are lodged at the land office and the caveat is entered on the title.

How a caveat is removed

• Voluntary withdrawal. The party who entered it withdraws, usually once the issue is resolved.
• Lapse. Some types of caveat have a limited period of validity.
• Application to remove. The registered proprietor applies for removal.
• Court order. Where the parties disagree, the issue goes to court to be decided.

The risk of entering a caveat without basis

A caveat entered without a proper interest can expose the person who entered it to a claim for compensation from the party affected. It is not a pressure tactic. Before entering one, your position has to be properly assessed.

If you are a buyer and there is a third-party caveat

Do not continue paying until the position is clear. Find out who entered it, on what basis, and whether the seller can resolve it within the completion period. This is one of the main reasons a title search belongs before signing, not after.

Frequently asked questions