A caveat is a formal notice, or warning, given to show that your property is of prior interest to somebody. If you have received a caveat and your property is in Queensland, you may not be able to transfer or organise a land deal until the caveat is withdrawn, removed, lapses, or canceled. In this case, the person who files a caveat is the ‘caveator’ and the person who owns the property is ‘caveatee’. The titles office (Department of Natural Resources, Mines and Energy – DNRME) registers the caveats.
The caveator must begin the court proceedings within 3 months, otherwise, the caveat stands lapsed. The Registrar of Titles can remove or cancel the caveat after it has lapsed. Following this, the caveator cannot file the same caveat to claim the same interest on your property. You may have the caveat removed or canceled before it lapses by taking the assistance of experienced litigators. The following steps may be taken to remove or cancel a caveat.
Send the notice to start the court proceedings
The caveatee can send a notice to the caveator to start the legal proceedings within 14 days. If the caveator fails to commence the legal process in 14 days, the caveat stands lapsed and may be removed or canceled by the Registrar of Titles.
Request the Supreme Court to remove the caveat
The caveatee may take a more aggressive approach and request the Supreme Court to remove the caveate without lodging a 14 days notice for the caveator. Under section 127 of the Land Title Act 1994 (Qld):
- The caveatee may at any time ask the Supreme Court for the caveatee to be removed; and
- The Supreme Court may make the order, on its appropriate terms, to be served to the caveator.
The caveator has some rights when the caveatee applies for the removal of the caveat. The caveator should demonstrate:
- A genuinely arguable case; and
- That the balance of convenience favours the continuation of the caveat.
There have been cases in the past where a caveator did not demonstrate a cavetable interest in a property. These cases have been listed in the Queensland Land Title Practice Manual. For instance, a property that has not been paid off completely does not give a genuinely arguable right to the vendor to caveat it.
If the caveator can demonstrate an arguable case, the court will then consider if the balance of convenience may support the removal of the caveat. The balance of convenience may be tested by factors such as undertakings to damages, undertaking to not to deal with the property of the caveatee, other securities of the caveatee apart from the property, the strength of claim, intention of the caveatee to dispose the property, and any potential effects on other parties likely to be affected by the caveat.
Seeking legal advice may help you if your property has been caveated. If the caveatee is successful in getting the caveat order removed, the caveatee is likely to be awarded the costs.