Caveats are both extremely useful and extremely powerful tools to use as a means of protecting legitimate proprietary interests in land, however they need to be understood and used correctly, otherwise you and your client could be exposed to a claim for damages or compensation.

Caveats place a “freeze” on other dealings with the title to land until the matter the subject of the caveat has been resolved. You can think of it as a barrier to others doing something to the title to land. Accordingly, a working knowledge of the operation and effect of a caveat is an essential component of a commercial or property lawyer’s skill set.

For example, if your client has an interest in land that cannot be protected by the registration of another type of dealing, the lodgment of a caveat against the title to the land would be a prudent step to take. For example, if a mortgage document creating an interest in land cannot itself be registered for any reason (such as the refusal on the part of the mortgagor (registered proprietor) to produce the certificate of title to enable registration of the mortgage), then the mortgagee can lodge a caveat on the title protecting the interest created under the mortgage.

Once a caveat is lodged and recorded against the folio of the register for the land, the Registrar-General/Recorder of Titles is required to send a notice to the registered proprietor of that land. This puts the registered proprietor on notice of the existence of the caveat and, accordingly, the registered proprietor may then take action to have the caveat removed. See Caveatable Interests – what are they?

Whether or not a caveatable interest exists is one of the most frequently litigated aspects of the law of caveats.

Generally speaking, for a caveator to hold a caveatable interest, the caveator must, at the time of caveating, have some legally recognised estate or interest in the land to which the caveat purports to apply. If a caveatable interest existed at the time of caveating but then, during the life of the caveat, circumstances changed such that the alleged interest in land was no longer able to be supported by a caveat, the caveator should take steps to withdraw the caveat from the title.

While it has been shown that the courts are willing to find caveatable interests in the most esoteric of circumstances, there have been an equally large number of circumstances that have been held insufficient to support a caveat. Property practitioners should be familiar with these circumstances. See Interests that are and are not sufficient to support a caveatable interest.

Section 74F(5)(a) of the Real Property Act 1900 (NSW) requires that caveats must be lodged in the “approved form”. This form is prescribed by the LPI, and is known as Caveat (Form 08X from the LPI website).

It is important to ensure that considerable care is exercised in completing a caveat form. This is because the lodgment of an insupportable caveat may result in damages being awarded against the applicant, if it were to be found that the caveat was lodged without justification.

Other incidental consequences of incorrect completion of the caveat form include possible breaches of the Oaths Act 1900 (NSW) and s 117 of the Real Property Act 1900 (NSW). Failure to observe the latter section, as well as regs 7 and 8 of the Real Property Regulation 2014 (NSW), may in fact result in the caveat being declared invalid (this comes from the “WARNING” on the Caveat form on page 2). If the caveat is declared invalid due to the negligence of the solicitor preparing the caveat, and the solicitor’s client then suffers loss, the solicitor may be open to a claim for professional negligence.

In practice, the preparation and lodgment of a caveat is considered to be a matter of urgency on the desk of a solicitor. It is all about the timing. Accordingly, if you receive instructions to prepare and lodge a caveat, you need to understand the importance of those instructions and the risks involved if you are unable to attend to the client’s instructions straight away. Understanding the nature of the caveatable interest and the outcome the client is trying to achieve will put you in the commercial picture. It is also common in practice for law firms to have an internal policy that only solicitors with an unrestricted practicing certificate can sign a caveat on behalf of a client. In some instances, a law firm’s internal policy may state that only the client is to sign a caveat form (that is, that the law firm will not offer to take on that risk and will not sign the caveat on behalf of the client). It is always important to check with the partners/principal of the firm. If there is no internal policy, then a discussion as to the likely risks if the lawyer signs the form is “good practice” before deciding to do so. See Lawyers being personally liable. See also Lodging requirements.

In Victoria, s 89 of the Transfer of Land Act 1958 (Vic) requires that caveats must be lodged in the “approved form”. The approved form (see Caveat) can be found on the Department of Environment, Land, Water and Planning (DELWP) website.

It is important to ensure that considerable care is exercised in completing a caveat form. This is because the lodgment of an insupportable caveat may result in damages being awarded against the applicant, if it were to be found that the caveat was lodged without justification.

In practice, the preparation and lodgment of a caveat is considered to be a matter of urgency on the desk of a solicitor. It is all about the timing. Accordingly, if you receive instructions to prepare and lodge a caveat, you need to understand the importance of those instructions and the risks involved if you are unable to attend to the client’s instructions straight away. Understanding the nature of the caveatable interest and the outcome the client is trying to achieve will put you in the commercial picture. It is also common in practice for law firms to have an internal policy that only solicitors with an unrestricted practicing certificate can sign a caveat on behalf of a client. In some instances, a law firm's internal policy may state that only the client is to sign a caveat form (that is, that the law firm will not offer to take on that risk and will not sign the caveat on behalf of the client). It is always important to check with the partners/principal of the firm. If there is no internal policy, then a discussion as to the likVictoria, s 90(3) of the Transfer of Land ely risks if the lawyer signs the form is "good practice" before deciding to do so. (See Lawyers being personally liable). See also Lodging requirements.

Pursuant to s 121 of the Land Title Act 1994 (Qld), a caveat must be signed by or on behalf of the caveator and the caveat must state:

• the name of the caveator;

• the address where documents can be served on the caveator;

• unless dispensed with by the Registrar:

• the registered interest affected by the caveat;

• if the caveat relates to only a part of the lot or part of a water allocation — a description of the affected part or in the case of a water allocation the number of megalitres affected;

• the interest claimed by the caveator; and

• the grounds on which the interest is claimed.

The relevant form, which is to be lodged at the Department of Natural Resources, Mines and Energy (DNRME) for registration, is a Caveat (Form 11) (Version 4). See Lodging requirements.

In Western Australia, a caveat may be lodged under the following provisions of the Transfer of Land Act 1893 (WA):

• Section 137 — this is the most common type of caveat. It can be lodged by a person who claims an estate or interest in the land, or in any lease, mortgage or charge.

• Section 30 — this caveat stops the bringing of the land under the Transfer of Land Act 1893 (WA).

• Section 176 — this caveat stops the granting of an application to rectify boundaries or the area of a certificate of title.

• Section 223A — this caveat stops the granting of an application to be registered as the proprietor by adverse possession of land already under the Transfer of Land Act 1893 (WA).

• Section 188(iii) — this caveat is lodged by the Registrar.

Caveats must be lodged in the approved form. The form required depends on the type of caveat being registered. See Lodging requirements.

It is important to ensure that considerable care is exercised in completing a caveat form. This is because the lodgment of an insupportable caveat may result in damages being awarded against the caveator, if it were to be found that the caveat was lodged without justification.

If the caveat is declared invalid due to the negligence of the solicitor preparing the caveat, and the solicitor's client then suffers loss, the solicitor may be open to a claim for professional negligence.

In practice, the preparation and lodgment of a caveat is often required as a matter of urgency. Accordingly, if you receive instructions to prepare and lodge a caveat, you need to understand the importance of those instructions and the risks involved if you are unable to attend to the client's instructions straight away. Understanding the nature of the caveatable interest and the outcome the client is trying to achieve will be essential. It is also common in practice for law firms to have an internal policy that only solicitors with an unrestricted practicing certificate can sign a caveat on behalf of a client. In some instances, a law firm's internal policy may state that only the client is to sign a caveat form (that is, that the law firm will not offer to take on that risk and will not sign the caveat on behalf of the client). It is always important to check with the partners/principals of the firm. If there is no internal policy, then a discussion as to the likely risks if the lawyer signs the form is "good practice" before deciding to do so. See Lawyers being personally liable. See also Lodging requirements.

Section 191(a) of the Real Property Act 1886 (SA) requires that caveats must be lodged in the "appropriate form". The form approved by the Registrar-General is known as Caveat (Form C1) from the Land Services Group website.

It is important to ensure that considerable care is exercised in completing a caveat form. This is because the lodgment of an insupportable caveat may result in damages being awarded against the applicant if it were to be found that the caveat was lodged without justification.

Other incidental consequences of incorrect completion of the caveat form include possible breaches of s 191(j) or s 232 of the Real Property Act 1886 (SA). If the caveat is declared invalid due to the negligence of the solicitor preparing the caveat, and the solicitor's client then suffers loss, the solicitor may be open to a claim for professional negligence. See Lawyers being personally liable.

In practice, the preparation and lodgment of a caveat is considered to be a matter of urgency on the desk of a solicitor. It is all about the timing. Accordingly, if you receive instructions to prepare and lodge a caveat, you need to understand the importance of those instructions and the risks involved if you are unable to attend to the client's instructions straight away. Understanding the nature of the caveatable interest and the outcome the client is trying to achieve will put you in the commercial picture. See Lodging requirements.

In Tasmania, s 133 of the Land Titles Act 1980 (Tas) requires that caveats must be lodged in the “approved form”. The approved form (see “Caveat” (Form CAV)) can be found on the Land Information System Tasmania (the LIST) website and lodged as a traditional paper lodgment or registered users of Tasmanian Online Land Dealings may lodge caveats digitally.

It is important to ensure that considerable care is exercised in completing a caveat form. This is because the lodgment of an insupportable caveat may result in damages being awarded against the applicant, if it were to be found that the caveat was lodged without justification.

In practice, the preparation and lodgment of a caveat is often a matter of urgency on the desk of a solicitor. It is all about the timing. Accordingly, if you receive instructions to prepare and lodge a caveat, you need to understand the importance of those instructions and the risks involved if you are unable to attend to the client’s instructions straight away. Understanding the nature of the caveatable interest and the outcome the client is trying to achieve will put you in the commercial picture. It is also common in practice for law firms to have an internal policy that only solicitors with an unrestricted practicing certificate can sign a caveat on behalf of a client. See Lawyers being personally liable. See also Lodging requirements.

Pursuant to s 137 of the Land Title Act (NT), a caveat must be signed by or on behalf of the caveator and the caveat must state:

• the name of the caveator;

• the address where documents can be served on the caveator;

• unless dispensed with by the Registrar-General:

• the registered interest affected by the caveat;

• the lot affected by the caveat or, if the caveat relates to only a part of a lot, a description of the affected part;

• the interest claimed by the caveator;

• the grounds on which the interest is claimed; and

• the extent of the prohibitions as to dealings.

A caveat may be lodged by any of the following under s 138 of the Land Title Act (NT):

• a person claiming an interest in a lot;

• the Registrar-General under s 18 of the Land Title Act (NT);

• the registered owner of the lot;

• a person to whom an Australian court has ordered that an interest in a lot be transferred; and

• a person who has the benefit of a subsisting order of an Australian court in restraining a registered proprietor from dealing with a lot.

The relevant forms which can be lodged at the Land Titles Office (LTO) for registration of a caveat are a Non Lapsing Caveat (Form 78) and a Lapsing Caveat (Form 79).

See Lodging requirements.

In the Australian Capital Territory (ACT), s 140 of the Land Titles Act 1925 (ACT) requires that caveats must be lodged in the “approved form”. The approved form is the Caveat (Form 036), which can be found on the Access Canberra website.

It is important to ensure that considerable care is exercised when completing a caveat form. This is because the lodgment of an insupportable caveat may result in damages being awarded against the applicant, if it were to be found that the caveat was lodged without justification.

In practice, the preparation and lodgment of a caveat is considered to be a matter of urgency on the desk of a solicitor. It is all about the timing. Accordingly, if you receive instructions to prepare and lodge a caveat, you need to understand the importance of those instructions and the risks involved if you are unable to attend to the client’s instructions straight away. Understanding the nature of the caveatable interest and the outcome the client is trying to achieve will put you in the commercial picture. It is also common in practice for law firms to have an internal policy that only solicitors with an unrestricted practicing certificate can sign a caveat on behalf of a client. See Lawyers being personally liable. See also Lodging requirements.

In NSW, there are three ways for a caveat to lapse:

• Where the estate or interest claimed by the caveator is satisfied by the lodgment and registration of a dealing that perfects the interest claimed under the caveat (for example, where a caveat protects the interest of an unregistered mortgagee, on registration of the mortgage itself, the caveat will lapse).

• On satisfactory completion of a lapsing procedure under s 74J of the Real Property Act 1900 (NSW). That is, the registered proprietor lodges an Application for Preparation of Lapsing Notice (Form 08LX from the LPI website) to have the caveat lapsed. This also assumes the procedure takes place without being challenged by the caveator.

• On satisfactory completion of a lapsing procedure under s 74I or s 74JA of the Real Property Act 1900 (NSW). That is, a party lodges a dealing for registration that is otherwise prevented by the caveat together with an Application for Preparation of Lapsing Notice (form 08LX) to lapse or partially lapse the caveat. This also assumes that the procedure takes place without being challenged by the caveator. See Lapsing procedure.

See Lapsing procedure.

In Victoria, there are also three ways for a caveat to lapse:

• Where the estate or interest claimed by the caveator is satisfied by the lodgment and registration of a dealing that perfects the interest claimed under the caveat (for example, where a caveat protects the interest of an unregistered mortgagee, on registration of the mortgage itself, the caveat will lapse).

• On satisfactory completion of a lapsing procedure under s 89A of the Transfer of Land Act 1958 (Vic). That is, the registered proprietor lodges a Form 43 (contained in the Land Victoria Lodging Book on the DTPLI website), which must be supported by a certificate signed by a legal practitioner referring to the caveat and stating that in his or her opinion, the caveator does not have the estate or interest claimed by him/her/it to have the caveat lapsed. This also assumes the procedure takes place without being challenged by the caveator.

• On satisfactory completion of a lapsing procedure under s 90 of the Transfer of Land Act 1958 (Vic).

See Lapsing procedure.

In Queensland, s 126 of the Land Title Act 1994 (Qld) imposes time limits on the duration of a caveat lodged under Pt 7 Div 2 of that Act, depending upon the action (or inaction) of the caveator and the caveatee after the caveat is lodged. For example, pursuant to s 126(2) of the Land Title Act 1994 (Qld), the caveatee may send to the caveator a notice requiring the caveator to start proceedings in a court of competent jurisdiction to establish the interest claimed under the caveat. If the caveator does not commence proceedings in a court of competent jurisdiction within 14 days after the notice is served and notify the Registrar within that 14-day period that the proceedings have been instituted, the caveat will lapse at the expiry of the 14 days: s 126(5) of the Land Title Act 1994 (Qld).

A caveat will otherwise lapse at the expiry of 3 months from the date of lodgment of the caveat if the caveator does not commence proceedings and provide notice of same to the registrar.

Pursuant to s 126(1) of the Land Title Act 1994 (Qld), a caveat will not lapse if it is lodged:

• by the registered owner or if his/her consent is deposited when the caveat is lodged (except in the case of an equitable mortgage or if the circumstances in s 126(1A) of the Act apply);

• pursuant to a court order under s 122(1)(d) or (e) of the Land Title Act;

• by the Registrar under s 17 of the Land Title Act; or

• other than under Pt 7 Div 2 of the Land Title Act, for example, if a caveat is lodged by a purchaser under an instalment contract.

See Lapsing procedure.

In Western Australia, caveats do not lapse after a specified time except as a result of a Registrar’s notice given under s 138 of the Transfer of Land Act 1893 (WA). The Registrar will give a notice to the caveator on presentation for registration of an instrument relating to the land on which the caveat is lodged and a written request by:

• a party;

• a solicitor;

• a settlement agent;

• a real estate agent; or

• a senior bank official.

Payment of the prescribed fee will then be required.

The Registrar’s notice will require the caveator to take action in court to substantiate the claim in the caveat within 14 days, failing which the caveat will lapse.

See Lapsing procedure.

In South Australia, unlike in the other jurisdictions, caveats do not “lapse”. In South Australia, a caveat will remain registered indefinitely until it is either “withdrawn” or “removed”.

If the caveator lodges a Withdrawal of Caveat (Form W1) from the Land Services Group website, upon registration, the caveat will be deleted from the title. A Withdrawal of Caveat must even be lodged by the caveator immediately prior to lodging for registration of any unregistered document to which it relates, such as a transfer, mortgage or lease.

If the caveatee lodges an application for Removal of Caveat (Form A3) from the Land Services Group website, the Registrar-General will send a notice to the caveator advising that the caveat will be removed from the register at the expiration of 21 days from the date of the notice, unless within that time it has been withdrawn or the Registrar-General has been served with a court order. At the expiration of the 21 day period, if the caveat has not been withdrawn and no court order has been served on the Registrar-General, the caveat will be removed from the register. See s 191 of the Real Property Act 1886 (SA).

See Lapsing procedure.

In Tasmania, there are our ways for a caveat to be removed:

• Withdrawal of caveat under s 48A of the Land Titles Act 1980 (Tas). The approved form (see “Withdrawal of Caveat” (Form WC)) can be found on the Land Information System Tasmania (the LIST) website and lodged as a traditional paper lodgment or registered users of Tasmanian Online Land Dealings may lodge caveats digitally.

• On order by the Supreme Court served on the Recorder of Titles under s 135 of the Land Titles Act 1980 (Tas).

• On satisfactory completion of a lapsing procedure under s 136 of the Land Titles Act 1980 (Tas). That is:

  unless within that period:

• By the Recorder of Titles, in certain limited cases where the caveat is on its terms spent or ineffective.

See Lapsing procedure.

The Northern Territory uses a particular lexicon in reference to dealings involving caveats. A “caveatee”, in relation to a lot over which a caveat has been lodged, means a registered proprietor of the lot or someone (other than the caveator) who has an interest in the lot. A “caveator”, in relation to a lot over which a caveat has been lodged, means a person in whose favour the caveat is lodged.

Caveats under the Land Title Act (NT) are either “non lapsing” or “lapsing”. See Non Lapsing Caveat (Form 78) and a Lapsing Caveat (Form 79) from the LTO website. Under s 142 of the Land Title Act (NT), a caveat is “non lapsing” where:

• it is lodged by the registered owner;

• the consent of the registered owner is deposited when the caveat is lodged;

• an office copy of a court order mentioned in s 138(1)(d) or (e) is deposited when the caveat is lodged;

• it is lodged by the Registrar-General under s 18 of the Land Title Act (NT); or

• it is lodged other than under Pt 7 Div 2 of the Land Title Act (NT).

Under s 142(5) , all other caveats lapse the earlier of:

• 14 days after notice is served on the caveator; or

• three months after the caveat is lodged.

Despite the above, under s 142(6) , a caveat does not lapse:

• if an appropriate proceeding has been started by the caveator and the Registrar-General has been notified of the proceeding; or

• if the caveator, or the authorised agent of the caveator, notifies the Registrar-General within 14 days of being served with a notice of the caveatee that he or she does not want the caveat to lapse and that he or she has started, or will start, a proceeding to establish the interest claimed under the caveat.

If a caveator, or an authorised agent of the caveator, notified the Registrar-General that he or she will start a proceeding, the caveat lapses three months after the notice of the caveatee was served on the caveator where the caveator does not, within that time, provide the Registrar-General with evidence that the proceedings have been started: s 142(7) .

See Lapsing procedure.

In the ACT, a caveat will lapse in the following circumstances:

• where the estate or interest claimed by the caveator is satisfied by the lodgment and registration of a dealing that perfects the interest claimed under the caveat (for example, where a caveat protects the interest of an unregistered mortgagee, on registration of the mortgage itself, the caveat will lapse);

• when it is withdrawn (using a Withdrawal of a Caveat form (Form 037) available from the Access Canberra website);

• it temporarily lapses, unless the court orders otherwise, after 14 days from when there is notice to the caveator that an application has been made for the registration of a document in respect of the land or interest to which the caveat relates. The lapsing of the caveat in this manner is only temporary, as the caveat is deemed to be reinstated once the document is registered (refer to s 106(1) and 106(2) of the Land Titles Act 1925 (ACT));

• by registration of a transfer by the Sheriff under a writ;

• by cancellation by the Registrar-General where the Registrar-General is satisfied that the land is no longer affected by the caveat (pursuant to s 43(5) of the Land Titles Act 1925 (ACT));

• o by removal by the Registrar-General pursuant to an application by the registered proprietor (using an Application for Lapsing of a Caveat (Form 038) available from the Access Canberra website). The Registrar-General will serve a lapsing notice on the caveator and give the caveator at least 14 days within which to obtain a court order to prevent the Registrar-General from removing the caveat. If the Registrar-General receives no notice of a court order, the Registrar-General will remove the caveat from the title: see s 107(1) and (2) of the Land Titles Act 1925 (ACT); and

• by removal by the Registrar-General pursuant to ss 107(3)(b) , 107B and 107C(2)(b) of the Land Titles Act 1925 (ACT).

See Lapsing procedure.

As previously noted, in practice, the preparation and lodgment of caveats must be treated as a matter of urgency. Parties may prepare and lodge their own caveats, with or without legal advice but typically a lawyer will sign and lodge a caveat on a client's behalf. As the signing and lodging party, the lawyer exposes himself/herself to risk and liability. When considering whether the caveat is justified, you should also consider what actions the caveat should prohibit, without consent from the caveator. This is relevant when it comes to drafting the caveat itself. Where possible, within the limits of the caveat form and the analysis of the seven items listed in sch 2 of the caveat form (this only applies for NSW), you should prohibit only certain dealings and applications rather than all dealings.

Ordinarily, an aggrieved party whose land is the subject of an improper caveat will seek compensation from the lawyer’s client, being the caveator. What might follow is a claim by the client against his/her lawyer or conveyancer based on negligent advice to lodge the caveat.

In New South Wales, s 74P of the Real Property Act 1900 (NSW) provides that “any person” who lodges a caveat without reasonable cause is liable. This includes the lodging lawyer. The equivalent provision for Victoria is s 118 of the Transfer of Land Act 1958 (Vic). In Queensland, s 130(1) of the Land Title Act 1994 (Qld) provides that a person who lodges or continues a caveat without reasonable cause must compensate anyone else who suffers loss or damage as a result.

The equivalent provision for Western Australia is s 140 of the Transfer of Land Act 1893 (WA).

In Victoria, s 90(3) of the Transfer of Land Act 1958 (Vic) provides that any person who is adversely affected by a caveat may bring proceedings against the caveator. Section 118 of the Transfer of Land Act 1958 (Vic) provides that any person lodging a caveat without reasonable cause “shall be liable to make any person who sustains damage thereby such compensation as a court deems just and orders”.

In South Australia, under s 191(j) of the Real Property Act 1886 (SA), a caveator who lodges a caveat wrongfully and without reasonable cause can be liable to pay compensation to any person who sustains damage as a result.

In addition, in Queensland, it is prudent practice for purchasers, between exchange and completion, to lodge a Priority Notice from the Department of Natural Resources, Mines and Energy (DNRME). The notice prevents the registration of any instrument not authorised by the notice which affects the purchaser's interest in the lot until the notice lapses or is withdrawn, removed or cancelled: s 140 of the Land Title Act 1994 (Qld). The notice is effective for 60 days from the date it is deposited with the Registry (s 142 of the Land Title Act 1994 (Qld)) unless extended and gives the buyer some protection against any dealing that may be lodged after the priority notice and before lodgment of the transfer. This does not prevent the lodgment of a caveat.

In Tasmania, s 138 of the Land Title Act 1980 (Tas) provides that a person who lodges or continues a caveat without reasonable cause must compensate anyone else who suffers loss or damage as a result.

In Tasmania, it is usual and proper practice for a purchaser to lodge a Priority Notice once the contract has become unconditional. The Priority Notice lists all the dealings that need to be registered in order to affect the transfer of the property from the vendor to the purchaser. The notice operates to prevent registration or recording of any dealing lodged with, or served on, the Recorder after the lodgment of the Priority Notice. Priority will be reserved for lodgment of the dealing specified in the notice for a period not exceeding 60 days commencing on the day after the notice is lodged with the Recorder of Titles: s 52 of the Land Title Act 1980 (Tas).

In the Northern Territory, s 146 of the Land Title Act (NT) provides that a person who lodges or continues a caveat without reasonable cause must compensate anyone else who suffers loss or damage as a result.

In the Australian Capital Territory (ACT), s 108 of the Land Titles Act 1925 (ACT) sets out, in general terms, that any person who, without reasonable cause, lodges a caveat with the Registrar-General shall be liable to make to any person who sustains damage such compensation as the court deems just and orders.

Practitioners can also be liable to a professional negligence claim if they fail to advise a client to lodge a caveat in order to protect a caveatable interest. This is particularly the case when a practitioner fails to advise a client to lodge a caveat to protect a client’s interest in a property post exchange of contracts for the sale of land and pending settlement (see for example Wehbe v Abboud and Pearl Lingerie Australia Pty Ltd v TGY Pty Ltd ).

See Lawyers being personally liable.