Can A Property Be Sold If It Has A Caveat?

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Home > Blog > Can A Property Be Sold If It Has A Caveat?

In Queensland, if a caveat is lodged on the title of the property you are hoping to sell, you may face some complications unless it is removed, withdrawn, cancelled or lapsed. The reason for this is that the purpose of a caveat is to prevent any dealings associated with the title.

Why would someone lodge a caveat on my property?

Any person who has a sufficient interest in the property is entitled to lodge a caveat on its title.

Examples of a person with ‘sufficient interest’ in the property includes:

  • someone seeking to claim an interest in the property. For example, a person who has already entered a contract to purchase the property;
  • one of the registered owners on the title who is seeking to protect their interests in it. For example, because one party on the title is trying to sell the property without their consent;
  • someone who is due to have an interest in the property transferred to them by order of an Australian Court; or
  • a Registrar who, under section 17 of the Land Titles Act 1994 (Qld), has the power to do so.

When a person is completing a caveat form they must be able to specify their interest in the property. An example of an interest includes having legal or equitable ownership of the property or otherwise having a right to or privilege over the property.

A person who is not a registered owner of the property but has a right to or privilege over it could be someone who has in some way contributed to the purchase of property or be a party, such as a a builder, who is owed money for constructing a property on the land on title.

What happens once a caveat is lodged?

After a caveat has been registered on the title, action must be taken reasonably quickly to secure the caveat or it will lapse within three months of lodgement.

A caveat may also lapse within fourteen days after lodgement if the person affected by the caveat serves a notice on the caveator (the person lodging the caveat) requesting them to commence court proceedings to establish the interest they are claiming under the caveat.

To avoid the caveat lapsing, the caveator must commence proceedings in a court within three months or fourteen days of receiving notice to establish their interest.

How can a caveat affect the sale of my property?

If you are planning to sell your property or take out a loan against the property the caveat may prevent you from doing so. It would be prudent to seek to have the caveat removed before listing the property or otherwise dealing with the title so your plans are not held up or further complicated.

How can I have a caveat removed from the title of my property?

There are four ways in which a caveat can be removed.

  1. A caveat may lapse after a period of time if the caveator does not commence proceedings.
  2. A caveat may be removed by application to the Supreme Court of Queensland. The Court can make an order to have the caveat removed from the title.
  3. A caveat may be removed if a Registrar cancels it.
  4. The caveator can withdraw the caveat, typically after a negotiation with the party on the title.

It is not possible to lodge a second caveat on a property on the same grounds as the first caveat, even if the initial caveat has since lapsed or been removed from the title.

If you own a property with a caveat and you would like advice on how it could affect the sale of your property, our experienced conveyancing lawyers in Cairns can assess your unique situation and help you choose your best course of action.