Lodging a Caveat

However, a caveat cannot simply be lodged on anyone’s property, even if there is an interest in the property – the circumstances must give rise to what is known as caveatable interest.

The most common caveatable interests fit into one of two categories:

1.      An equitable interest, whereby someone has directly paid money towards a property but is not registered as a legal owner; and

2.     A charge, whereby a creditor has a signed an agreement with the owner of the property that allows the creditor to lodge a caveat and seek payment from the sale of the property, if the owner defaults.

To Lodge or not to Lodge

Two common scenarios in which people might want to lodge caveats are family law disputes and debt recovery. There may be caveatable interests supporting the lodging of a caveat in these circumstances, but it is not an automatic right.

In a family law matter, it is possible to be entitled to a property settlement that includes a property owned by a partner. However, demonstrating a financial contribution to the property is necessary to lodge a caveat.  Family law settlements consider many factors, including non-financial contributions and homemaking and caring for children. There are alternatives to caveats, such as injunctions and other avenues and recourse in the Family Law Courts, to prevent property being dealt with improperly.

If an individual is owed money and learns the debtor owns property, it may be tempting to try lodge a caveat over that property to secure the debt.  However, unless the individual can prove a financial contribution to that property or a signed deed of charge, they can not do so. Other debt recovery options may be available that may or may not involve the property.

Caveats are inexpensive to lodge and can be lodged by a conveyancer or property lawyer, however it can be costly to lodge (or refuse to remove) a caveat where there is no legal basis for a caveat. Victorian Courts have become stricter in recent years, making costs orders and even imposing penalties on lawyers and conveyancers personally where they have lodged caveats improperly.

Whatever your circumstances, whether your interest is caveatable or otherwise, we have lawyers who can help you reach a resolution.

If you wish to discuss caveats, please contact our Property Law team on (03) 9870 9870.

‍

‍