What happens to land if there is a caveat?

Date: Mar 05, 2013
Document Type: Newsletter

As a valuable commodity, title to land and the protections it confers via the Torrens system is extremely important. However, what about unregistered interests in land, more often referred to as caveats? What effect do caveats have on the land?

The existence of a caveat essentially operates as an injunction to the Registrar by restraining any registering of any dealings with the land without the consent of the caveator. In jurisdictions where a caveator can consent to the registration of the dealing, the caveat may not lapse such as s 90(1)(b) of the Transfer of Land Act 1958 (Vic):

“(b) a transfer or dealing as to which the caveator or his agent has lodged with the Registrar his consent in writing;”

Dealings registered where a caveator has consented, in the absence of fraud or an agreement to the contrary, the interest that is registered will not be subject to an interest claimed by a caveator. It should be pointed out that some interests will not be overridden by registration, and such interests will still remain after registration, even in instances where the land is ‘protected’ by a caveat. However, caveats can differ between the jurisdictions and it is important that you talk to a lawyer if you have a question relating to a property matter.

Can the caveat be noted by the Registrar?

There is no mandatory requirement in every jurisdiction for the Registrar to note the caveat on the register, but it can be registered, and the effect that the notation has is providing notice to the world of the caveator’s interest, along with providing direction to the Registrar. Additionally, the Registrar is restrained from any dealings that are prohibited by the caveat until the caveator has been afforded the opportunity to establish their claim. However, the Registrar provides notice to the registered proprietor that a caveat has been lodged.

Can the Registrar register a dealing, even if there is a caveat?

Although, the Registrar cannot register dealings that affect the estate or interest of the caveator, there may be some exceptions where the Registrar is able to register a dealing, even if there is a caveat in place. The exceptions do vary between the states and territories, however, the interests generally concern matters such as registration of transmissions, vesting orders, discharges of mortgages and transfers pursuant to writs. Additionally, there are some jurisdictions that make an allowance for ‘permissive’ or ‘conditional’ caveats.

What happens if a dealing for registration has been lodged to the Registrar?

For the most part, a dealing lodged for registration cannot go ahead to register if there is a caveat in place restraining the registration of the dealing on the title. Besides the Northern Territory, Queensland and South Australia, notification to the caveator must be provided that a dealing has been lodged for registration. If a registration has been lodged, depending on the jurisdiction, the caveator has between 14 to 30 days to agree to the registration of the dealing, or to commence proceedings in order to establish the right for the caveat to be maintained, or the caveat will lapse.

Caveats that are defective in form will not be considered, however, if extension is granted, it will generally be for a period of time that will ensure the matter can be dealt with by the courts.

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