A caveat is a formal notice lodged on a property’s certificate of title that claims an interest in the land. It acts as a warning to anyone dealing with the property that a third party has a legal claim. A property with a caveat on title cannot be sold, mortgaged or transferred without first dealing with the caveat. Caveats are common in Australian property transactions and are not automatically a red flag — but they must be resolved before settlement.
Why would a caveat be lodged on a property?
- Purchaser’s caveat: A buyer lodges a caveat after signing a contract to protect their interest while awaiting settlement.
- Lender’s caveat: A second mortgage lender lodges a caveat to protect their security interest.
- Vendor’s caveat: A seller lodges a caveat to protect unpaid purchase money (vendor finance arrangements).
- Family law caveat: A spouse or de facto partner lodges a caveat to protect their interest in a property during a separation.
- Trust or estate caveat: A beneficiary lodges a caveat to protect their interest in a deceased estate.
- Builder’s caveat: A builder lodges a caveat to protect unpaid construction costs.
How do I check if a property has a caveat?
A caveat is shown on the certificate of title. Your conveyancer or property lawyer will conduct a title search as part of the due diligence process and will identify any caveats registered against the property. In Victoria, titles are maintained by Land Use Victoria and searches can be conducted online through the LANDATA system.
What happens to a caveat on settlement?
Most legitimate caveats (such as a purchaser’s caveat or lender’s caveat) are removed as part of the normal settlement process. Your conveyancer manages the removal and registration of new interests simultaneously on settlement day. A caveat that cannot be resolved before settlement will delay or prevent settlement from proceeding.
How do you remove a caveat?
There are three ways to remove a caveat:
- Voluntary withdrawal: The caveator (person who lodged it) lodges a withdrawal of caveat at the land titles office.
- Lapsing: The registered owner can serve a lapsing notice on the caveator, who then has 30 days to apply to the Supreme Court to maintain the caveat. If they don’t act, it lapses automatically.
- Court order: The Supreme Court can order removal of a caveat where it has no legal basis.
Can I lodge a caveat myself?
Yes — in most states, a caveat can be lodged directly at the land titles office by completing the prescribed form. However, lodging a caveat without a genuine legal interest is a serious matter. An improper caveat can expose you to damages claims if it causes financial loss to the property owner.
Frequently asked questions
Does a caveat mean the property can’t be sold?
Not necessarily. A caveat prevents registration of a transfer — but settlement can still proceed if the caveat is removed or the caveator consents to the transaction as part of settlement. Your conveyancer will manage this.
What is the difference between a caveat and a mortgage?
A mortgage is a registered security interest that gives the lender specific legal rights over the property. A caveat is simply a notice of claim — it does not give the caveator the same enforcement rights as a mortgagee. A lender typically lodges both a mortgage and a caveat to maximise protection.
How much does it cost to lodge a caveat?
In Victoria, the land titles office fee to lodge a caveat is approximately $150-$200. Legal fees for preparing and lodging a caveat vary but are typically $500-$1,500.
GeeVee verdict: A caveat on title is a flag, not a dealbreaker. Ask your conveyancer to identify the caveator and the nature of the claim immediately — most caveats are routine (purchaser’s or lender’s caveats) and resolve on settlement. A caveat from a builder, former partner or estate beneficiary needs careful legal attention before you proceed.
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