What Happens after a Caveat is lodged in Queensland?

Caveats, when used correctly, are useful tools for protecting your rights in relation to property.  Many people are unaware of the consequences of lodging a caveat and inadvertently end up in embroiled in complex legal proceedings as a result lodging the caveat.  

It is important to ensure you are aware of all of the risks involved in lodging a caveat before you decide to do so.

Who can lodge a Caveat

To be eligible to lodge a caveat over property, you must first have a caveatable interest i.e. an estate or interest in any land. 

There are several categories of people who are eligible to lodge a caveat over another person’s property, these include, but are not limited to:

• A person claiming an interest in a lot;
• A registered owner of the lot;
• Equitable mortgagee or charge; or
• A beneficiary of a constructive, resulting or implied trust relating to an interest in the property.

 

Consequences of Lodging of Caveat

Lodging a caveat prevents the registered proprietor dealing with that property until the caveat lapses, is withdrawn or removed.

By lodging a caveat, you begin a legislative process which must be followed.  The caveat must proceed through the steps outlined in the relevant legislation. The end result may see you forced into complex litigation proceedings in order to support your interests.

The process is as follows:

1.  Notification:  Once the caveat has been lodged, the titles office will send notices to each person whose interests are affected by the lodgement of the caveat.

 2.  Court Proceedings: Once the caveat has been lodged court proceedings must be instigated in order for you to support your interest under the caveat.  These proceedings must be filed by you either:

 (a)  Within 3 months from the date the caveat is lodged; or

 (b)  Within 14 days from receipt of a notice from the registered proprietor of the property under section 126 of the Land Title Act; or 

Under point b. above, the registered proprietor can force you to issue proceedings in court by serving you with a notice.  If you do not issue proceedings within 14 days from receipt of the notice, or failing receipt of the notice, within 3 months, and notify the titles office that you have done so, the caveat will automatically lapse.  Once a caveat has lapsed, you cannot re-file the caveat on the same or similar grounds, without first obtaining leave of the court. 

Additionally, the registered proprietor of the property has the right to apply immediately to the Supreme Court for an order that the caveat be removed. In order to defend such an application you must produce evidence to convince the court that the caveat was lodged properly and that you have a genuine interest in the property. 

In summary, it is likely that you will be forced to issue proceedings, and/or will have proceedings issued against you, as a result of lodging the caveat.  This ultimately results in further legal costs to pursue or defend the relevant court proceedings. 

Compensation

If it is found that you have lodged a caveat without reasonable grounds, you are liable to compensate anyone else who suffers loss or damage as a result.  For example, should the sale of the property be held up, or fall through as a result of the caveat being lodged, and it was found by the Court that you did not have sufficient grounds to support the caveat, you may be held liable for the loss of the sale as a consequence. 

It is very important to seek legal advice as to whether you have a caveatable interest and reasonable grounds prior to lodging a caveat, otherwise you could be liable to pay legal fees and compensation to the registered proprietor. 

Benefits of lodging a caveat

Lodging a caveat is a useful tool in protecting your rights in relation to a property. In many cases the parties are reluctant to embark on the expense of litigation with respect to the caveat and consequently it gives you leverage to negotiate a satisfactory settlement between the parties.  

It is important to be mindful of the forced process that must be followed if the registered proprietor is not prepared to negotiate and requires you to file proceedings in the court to support your interests. 

Our Commercial Litigation team have expert knowledge in relation to caveatable interests and would be happy to assist you if you think you have a caveatable interest in a property.

Looking for the experts in dispute resolution and commercial Litigation? Contact our Dispute Resolution and Commercial Litigation Lawyers, Attwood Marshall, to book your with us appointment today!

You can call us on 1800 621 071 or use our Online Enquiry Form to send us your details.

With three offices conveniently located at Robina, Coolangatta - Tweed Heads and Kingscliff, you can also visit an office near you.

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Attwood Marshall Lawyers
Northern NSW & Gold Coast, Queensland

 Dispute Resolution and Commercial Litigation Lawyers
 

 

Comments

One Response to “What Happens after a Caveat is lodged in Queensland? ” - Share Your Thoughts

1. M Straub on Thursday 9th September, 2010
   

   Thank you, this article explains my query very well. I know where to come for help.