15/09/2016, 10:14:AM
15/09/2016, 10:14:AM
Don’t be caught out by a caveat!
You have sold your amazing property and the purchaser is excited to move in! However, on the day of settlement you cannot provide clear title as someone lodged a caveat on the title 5 days beforehand. There is a breach of contract and the purchaser is now considering pursuing damages against you.
So what are some of the options you have to remove the caveat that is stopping the sale?
The first option is to follow the procedure under section 89A of the Transfer of Land Act 1958, which is filing an application to the Registrar that the person who lodged the caveat, called a caveator, does not have an estate or interest in the property claimed by them. The Registrar will give notice to the caveator, that unless the caveat is withdrawn, court proceedings will be brought within 30 days to substantiate the claim.
The second option is to lodge a dealing subject to section 90(1) of the Transfer of Land Act 1958, and let the caveat lapse. But keep in mind, that the party who lodged the caveat, may seek and extension with the permission of the court, which will further hinder the sale of the property.
If you are confident that the party who lodged the caveat holds no proprietary interest in the property, then an application should be made to the court for the caveats removal. When the request comes before the court, the court will determine if the party that lodged the caveat has a proprietary interest in the land, and whether it is proper to keep the caveat on the title.
If the dispute comes before the court, the onus of proving the right to have the caveat on the title which is stopping the sale, falls on the party that lodged the caveat.
Though keep in mind, where the party that has lodged the caveat, does have a valid interest to be protected, then the caveat will not be removed.
If the details of the caveat lodged does not show an estate or interest in the property, an application to remove the caveat by the owner will be successful.
If it is proven that if the person who lodged the caveat did so without proper right, compensation to the owner of the property may be ordered by the court against the party who lodged the caveat.
There are always dangers in selling and buying property, and the best protection is getting that legal advice to protect your legal rights & interests.
The comments in the aforementioned do not constitute legal advice and are general in nature, and if legal advice is required please contact: John Melis at Legal AU Pty Ltd (03) 9999 7799
Legal AU Pty Ltd Lawyers are “Liability limited by a Scheme approved under Professional Standards Legislation.”
