If you’re borrowing money to purchase a home or investment in property in Australia your loan agreement may have a clause about a “caveatable interest.” This is a term you may not have heard of before, so here’s an outline of what they are and what they mean to you.
What is a caveatable interest?
A caveatable interest means that someone believes they have an interest over the property you’re purchasing. There are several reasons this may occur. For example, if there is a secured loan over the property then that would be a caveatable interest of the lender. Other examples of caveatable interests include:
- An existing agreement to purchase the property
- An easement over all or part of the property
- The owner of the property has a contract with an express caveat over the property
Caveats can be lodged by anyone who reasonably believes they have an interest over the property.
Can I lodge a caveatable interest?
Yes, if you have signed an agreement to purchase a property then speak to a lawyer about lodging a caveatable interest over the property. There may be advantages to lodging your caveat quickly, like if the seller accidentally offers the property to someone else.
How do I lodge a caveat on a property?
In some states like New South Wales, there is an approved form that must be used to register a caveat. This caveat is then recorded on the register for property titles and the owner of the land is notified. The form needs to be completed in a specific way to be valid, so it’s a good idea to speak to a lawyer before lodging a caveatable interest.
How does a caveat affect my purchase of land?
You can find out if someone else has a caveat over the property from the Titles office. If someone else has lodged a caveatable interest this may delay the sale of the property.
There are several ways a caveat can be removed, like if it’s no longer relevant or a lapsing order effectively removes it. If someone’s caveatable interest is holding up the purchase of your property it’s worth speaking to your legal advisor to determine if you can do anything to expedite the process.
Do I have any rights if the caveat isn’t reasonable?
If you believe that someone has lodged a caveatable interest on the property without a valid reason, then speak to your lawyer to see if you are entitled to compensation.
If you’d like know more about caveatable interests, contact one of our experienced advisors at PMF Legal.