Caveat

It is fair to say that a caveat is not strictly classified as a real property security like a mortgage. However, a caveat can act as security, and caveats are an effective means of protecting legitimate proprietary interests. This is because they place a “freeze” on anyone dealing with the title to land until the subject of the caveat has been resolved. Accordingly, a working knowledge of the operation and effect of a caveat is an essential component of a legal practitioner’s skill set, especially when the legal practitioner’s work involves advising on the taking of security, such as in financing transactions.

This guidance note starts with explaining what caveats are used, and what are caveatable interests (that is, interests that will support a caveat).

In order for legal practitioners to utilise caveats as a means of protecting legitimate proprietary interests, legal practitioners need to appreciate the effect of lodging a caveat, which is explained in this guidance note. This guidance note also includes a number of practical tips to assist a legal practitioner when completing a matter or a transaction that involves a caveat.

Two checklists accompany this guidance note, which can be used by legal practitioners to help determine whether an interest would or would not support a caveat.

See Caveat.