Understanding Caveats In Queensland Property

When dealing with property transactions in Queensland, you may encounter the term "caveat" and wonder what it means and why it appears on a title search.

Let's break down the essentials of caveats, why they are lodged, and what to consider if you come across one during a property transaction.

What Is A Caveat?

The term "caveat" comes from Latin, meaning let him beware. It's a good precursor. Caveats are generally not something you want to see in a standard residential conveyance.

In Queensland property law, a caveat is a legal notice lodged on the title of a property to protect the interest of a party who claims a right over it. This claim can prevent the current owner from transferring or selling the property until the issue is resolved.

Caveats are typically lodged when there is a dispute, whether about ownership, financial matters or to safeguard a party's interest in the property. For example, a party with a legitimate interest in the property may lodge a caveat to ensure they don't miss out on a share of the proceeds when the property is sold. It is common in complex family disputes where one spouse owns a property, and a caveat is lodged by the other spouse to ensure that the property is not sold prior to any agreement being reached.

When Are Caveats Used?

Caveats are commonly used when one party is owed money by the property owner. By lodging a caveat, the party that is owed money can prevent the property from being sold until they secure payment.

It's important to note that you cannot just lodge a caveat because you believe you are entitled to do so. There are strict requirements under the Land Title Act 1994, and many caveats have been sucessfully removed through litigation.

To lodge a valid caveat, the person must have a caveatable interest in the property. This term refers to a legitimate legal interest or claim over the land. Determining what constitutes a caveatable interest can be complex, and generally required tailored legal advice by an experienced property lawyer.

It’s important to note that lodging a caveat without a proper legal basis can result in liability for any loss or damage suffered by others as a result of the caveat.

How To Lodge A Caveat

Lodging a caveat involves a legal process, document lodgement with Titles Queensland, and will always incur a cost.

As at the time of writing, the registration fee at Titles Queensland is $266.45, in additional to any required legal fees for preparing the caveat. The process involves completing the necessary Titles Queensland forms and ensuring the caveat is lodged correctly.

There are two main types of caveats:

• Automatic Lapsing Caveats

  These are lodged without the consent of the registered owner, typically when the owner owes money to the caveator. The caveat remains on the title for 90 days unless court proceedings are commenced within that time. If no action is taken within the 90-day period, the caveat lapses, and special leave from the court is required to lodge another one.

  
  

• Non-Lapsing Caveats

  These are lodged with the consent of the registered owner and typically apply when the caveator has an interest such as an unregistered mortgage. While the caveat is in place, the property cannot be sold, and additional mortgages cannot be registered.

How Caveats Affect A Contract Of Sale

If you’re purchasing a property, and have noted that there is a caveat listed on title, you may wonder what needs to be included in the contract.

The answer is simple: ensure the caveat is note listed under "matters affecting the property" on page 3 of a standard REIQ contract. If you do, the buyer is agreeing to purchase the property with the caveat in place, which is generally not desirable.

In most cases, the seller must release the caveat before or at settlement. Failing to do so may constitute a breach of contract. If needed, the seller's solicitor can draft a clause allowing them time to resolve the issue or terminate the contract if the caveat cannot be released prior to settlement.

Seek Legal Advice

Lodging or dealing with a caveat is a serious legal matter, and should not be taken lightly. Whether you are a buyer, seller or someone with a claim over a property, it’s essential to seek appropriate legal advice to understand your rights and obligations.

CONTACT OUR PROPERTY LAWYERS

For any questions or assistance with caveats or property law in Queensland, don’t hesitate to contact RHC Solicitors to see how we can help. Our dedicated conveyancing team and senior property lawyers can guide you through the process, and ensure your interests are protected.

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Disclaimer: This publication is not intended to be comprehensive, nor does it constitute legal advice. We are unable to ensure the information is current and there is no guarantee in relation to accuracy. You should seek legal or other professional advice before acting or relying on any of the content of this publication. The views and/or opinions expressed in this publication is that of the author and may not necessarily represent the views and/or opinions of RHC Solicitors.

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