What happens when you lodge a caveat?

Where parties are in dispute regarding property matters, a caveat is often used to allow time for the party claiming a caveatable interest in property (‘the caveator’) to commence court proceedings.

Caveats are a complex area of law, and it is important to obtain legal advice in relation to preparing and lodging a caveat. However, parties contemplating lodging a caveat also need to carefully consider what will happen after a caveat has been lodged.

While there are exceptions, generally the lodgment of a caveat will prevent the registration of subsequent instruments affecting a property. Upon lodging the caveat, the Registrar must give written notice to particular interest parties, including the registered owner of the property.

Action Registered Owner can take when receiving notice of caveat

Upon receiving notice that a caveat has been lodged over their property, the registered owner can:

  1. Take no action.

Generally, the caveat will lapse within three months of lodging the caveat, unless the caveator commences proceedings and gives notice of such to the Registrar.

  1. Serve notice on the caveator requiring them to commence action to establish the interest alleged under the caveat.

If the registered owner serves notice on the caveator and notifies the Registrar, then the caveator will have 14 days in which to commence proceedings and notify the Registrar. If they have                not commenced proceedings 14 days after receiving notice, then the caveat will generally lapse and the registered owner will be able to request that the Registrar removes the caveat from                   title.

  1. Make an application to the Supreme Court.

The registered owner can also apply to the Supreme Court for an order that the caveat be removed. They can claim compensation from the caveator for any loss or damage suffered if the                    caveat is found to have been lodged without reasonable cause. There will be a presumption that the caveat was lodged without reasonable cause (s 130(3) Land Title Act 1994 (Qld)), and                    damages may also include exemplary damages (s 130(2) Land Title Act 1994 (Qld)).

Steps to be taken after the caveat is lodged

If the caveator hasn’t already, they will need to confirm how they wish to proceed once a caveat has been lodged. Pursuant to s 129 of the Land Title Act 1994 (Qld), once the caveat either lapses or is removed, the caveator will not be able to lodge a further caveat on the same or substantially the same grounds as those stated in the original caveat (other than with leave of the court).

While it can often be in the caveator’s best interests (due to time and expense) to negotiate a resolution without needing to commence court proceedings, as noted above, if the registered owner serves notice on the caveator requiring them to commence action they will only have 14 days in which to commence proceedings and notify the Registrar. This notice to the Registrar must be made by way of depositing a Form 14 General Request along with a court sealed office copy of the proceedings.

When commencing proceedings, it is also important to ensure that the order sought in the proceedings expressly relates to the interest claimed in the caveat. This is because the Registrar will be looking for this when notice is given to the Registrar that proceedings have been commenced.

The above information is general information on the subject matter, and it is important that advice be sought about your specific circumstances. If you require advice or assistance with a property dispute, or you are considering your options in relation to lodging a caveat, contact the experienced team at Miller Sockhill Lawyers on 07 5444 4750.