Caveats – The Red Flags of Real Estate


A key part of your research when investing in a property is considering whether you should lodge a caveat on it, but what does a caveat mean and who can and cannot lodge one?

In this article, we’ll take you through the definition of a real estate caveat as well as the withdrawal of a caveat.

We’ll also discuss the fees associated with the withdrawal of a caveat and how that takes place.

What is it?

A key part of your research

One of the problems with the law is that it can be quite complex for the layperson to understand.

There is a lot of legal jargon that only lawyers seem to understand.

But we all need to understand different laws and especially within the real estate realm given it’s so highly regulated.

In a literal sense, a caveat means a “warning”.

According to FindLaw Australia, the definition of a caveat is a notice that a person claims a particular unregistered interest in the property.

The person lodging the caveat (the caveator) will provide details of their claim and means for them to be formally contacted in connection with the caveat.

The relevant government body will then notify anyone with an interest in the property who is affected by the caveat.

So what does having an “interest” in property actually mean?

Basically, it means that someone else has an interest in the property, which usually is some relation between the debt and the property or they have an equity interest in it.

The lodging of a caveat over a property is a way of telling anyone who wants to deal with the property to be aware of the fact that someone else’s interest already has priority.

In other words, a caveat is a written warning to anyone who checks the Certificate of Title of the property that the person who lodged the caveat has an interest in it.

The Registrar of Titles cannot deal with the property without first notifying the caveator.

Who can lodge a caveat?

When a buyer signs a contract to purchase real estate, he or she acquires what is known as a “caveatable interest”.

This means that the purchaser is entitled to register a caveat to protect that interest.

While it can difficult to define, there are a number of people who might lodge a caveat on a property.

However, a caveat could be lodged by any of the following:

  • A person with an equitable interest in the land under a contract of sale; Who can lodge a caveat?
  • A seller of the land who has received part of the instalments for the purchase price, but is no longer the registered owner;
  • A purchaser who is paying the purchase price in instalments, but is not the registered owner;
  • A person with a right of access to the land (e.g. by an unregistered easement);
  • A tenant under an unregistered lease;
  • Someone who has also signed the contract to buy the property – this is often a mistake made by two real estate agents;
  • A creditor who wants to prevent the seller from disposing of the property.
  • Equitable mortgagee;
  • A partner;
  • Lessee;
  • Beneficiary under a trust;
  • A victim of fraud.

It’s vitally important to understand that only a person who has a caveatable interest is entitled to lodge a caveat or to instruct their lawyer to lodge a caveat on their behalf.

Likewise, with any real estate transaction, it is best to have the caveat lodged by a lawyer so that advice can be obtained as to whether a caveatable interest actually exists, whether there are any contractual prohibitions on the lodging of a caveat, and whether further registrations to be made on the caveator’s behalf may be affected (a carelessly lodged caveat could prevent a purchaser’s own Transfer of Land from being registered or cause a lender to refuse to provide funds on settlement day).

What does it cost?What does it cost?

Of course with any type of legal document, there is usually a fee associated with it.

There are a number of fees required to be paid to the relevant state government department as well as legal fees if you use a lawyer to lodge a caveat on your behalf.

Legal fees can vary but in Victoria may be more than $100, which includes lodging the caveat at the Land Titles Office.

There will also be a fee to pay when the caveat is withdrawn.

In Victoria, fees associated with caveats are:

Procedure Registration fee (paid in person) Registration fee (paid by post)
Lodging a caveat – equitable charge $46.30 $51.30
Withdrawal of caveat $46.30 $51.30
Registration of statutory charges $92.70 n/a
Extinguishment of charge $92.70 n/a

When a caveat is lodged on a property it prevents the registered owner from selling it for a specified period of time from the start of the caveat on the property.

Again, it’s vitally important, that only people with an actual interest in a property should lodge a caveat.

This is because a caveat without any merit can result in compensation needing to be paid to the registered owner if they have suffered any losses because of it.

What are the risks if I don’t lodge a caveat?

While there are a number of people who might have the right to lodge a caveat on a property, many people do not.   

It is a common misconception that any creditor can caveat a debtor’s property to secure the repayment of a debt.

However, this results in many creditors exposing themselves to considerable risks in cost penalties because they have registered a caveat without necessarily having a caveatable interest.

A caveat is merely a notice of claim which may or may not be a valid one.

The validity of the claim must be determined at some stage.

There are two main procedures to remove a caveat and in each case, a caveator must be prepared to incur considerable expense to prove their interest in the property if they do not want the caveat to be removed. They are:

  • Removal by Application to the Registrar General
  • Removal by Order of the Supreme Court

In both instances, the caveator will be obliged to commence court proceedings or defend proceedings to prove their caveatable interest.

The costs of these court proceedings will usually follow the event, which effectively means that if you are unsuccessful in proving a caveatable interest the costs will be claimed from you.

This has the potential to amount to liability to pay costs in the tens of thousands of dollars. Liability to pay costs

Even if you have a caveatable interest, it is also important to understand that in most cases, you may only ever caveat a property for that particular interest once.

If that caveat is removed as a result of a caveator’s failure to prove their interest, they have no further opportunity to caveat the property for the same interest.

It’s also important to understand the timing of the lodgment of a caveat and whether to lodge one or not.

If you are buying property, for example, and the owner has accidentally accepted two different offers, then the person who lodges the caveat first is likely to end up being the legal owner.

Can you have a caveat withdrawn?

Can you have a caveat withdrawn?

A caveat remains effective until it is withdrawn, removed or otherwise extinguished.

So long as a caveat remains in force, the Land Titles Office must not register any dealing with the land.

A caveat can be withdrawn at any time by the caveator by simply filling out the necessary forms and paying the associated fees.

There are a number of ways that a caveat can be withdrawn.

The most common way is through a Lapsing Notice, which is issued by the owner of the property and then served on the person/party who has lodged the caveat.

The caveator then has a set period of time from the date of service to seek an order from the Supreme Court for an order extending the operation of the caveat. If an order is granted, it must be lodged with the LPI before a specified period of time is up.

If no steps are taken by the caveator, the caveat will lapse, that is, it will fall off the title.

*The information provided in this article is general in nature and does not constitute personal financial advice. The information has been prepared without taking into account your personal objectives, financial situation or needs. Before acting on any information you should consider the appropriateness of the information with regard to your objectives, financial situation and needs. 


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'Caveats – The Red Flags of Real Estate' have 31 comments

    Avatar for Andrew Mirams

    December 19, 2021 Phi

    Hi Michael,
    I have a caveat, a Charging Order and a Warrant of Sale against the debtor’s property. I have been representing myself without a lawyer in Court for the last 3 years. There was a caveat was lodged before me (also debt related). I have talked to this person, and I knew for sure that she did not take any Court action against the debtor as he is her good old friend. In this case, who is prioritise? Now is the right time for me to go ahead with the Warrant of Sale. I have talked to the Sheriff and they said they do not involve in the process of getting this caveat removed. So can I just write or meet this “Caveator” and try to talk to her to withdraw her caveat? and if she refuses to do so. How can challenge her in Court? Thanks. Regard,


      December 19, 2021 Michael Yardney

      Phi my advice to you is to get a solicitor to professionally represent you. The fact that you need to ask this type of question suggests that you’re not looking after your best interest – how could you when you’re not qualified?


    Avatar for Andrew Mirams

    November 15, 2021 Marcello

    Hi I just sold a property and I was told that the 1 caveat I had can be removed on settlement through the funds. Is that ok.


      November 16, 2021 Michael Yardney

      This depends who took out the caveat and what interest they have in the property. Ask your soliciitor


    Avatar for Andrew Mirams

    April 15, 2021 Vijayalakshmi

    Hi Michael,

    As a property purchaser in NSW, am I entitled to issue a notice to terminate to the Seller on the day of completion / settlement in case they have not removed the caveats and hence the sale did not go through ? Or is it something that has to be mentioned explicitly in the contract of sale ?
    All I see is a clause that says the seller is entitled to issue a notice to terminate to the buyer if the buyer couldn’t complete due to some reason and nothing noted for vice versa.


      April 15, 2021 Michael Yardney

      Check with your conveyancing solicitor, but the vendor will be made aware of his obligations by his solicitor.
      And your solicitor won’t allow you to settle if the vendor has not fulfilled his obligations.
      Once you deliver the vendor a ntice they will have a fixed time in which they must rectify the situation, you can’t just pull out of the contract


    Avatar for Andrew Mirams

    January 29, 2021 Karen Mcarthy

    I’m the executor of my moms will and the sale of my moms house is split between me and my nephew (as on the will), but my moms deceased husband son has put a complaint in with probate, my solicitor sent him a warning, has he the right to the house and we haven’t spoke or seen him for 9 years ty


      January 29, 2021 Michael Yardney

      I’m sure you have your solicitors legal opinion on this. So I’m not going to get involved in giving legal advice – it will be wrong without knowing all the circumstances


    Avatar for Andrew Mirams

    January 6, 2021 Daniel

    Hi Michael,
    I am equal partners in a villa that my mother left in her will, myself and my two sibling. My two siblings are the ex. Off the will. When we put it on the market 8 months ago, we had an offer off $670,000. My siblings declined the offer!
    Two months ago, and a different realestate agent Selling it, at a lower selling price, we were offered $643,000, my siblings declined again, and both siblings lied to me and said they would except the offer off $643,000, Now nobody even enquires about it, thinking it’s got problems due to the time it’s been on the market. Everything I suggest falls on deaf ears!
    My brother has wanted to buy the villa since my mother’s death.
    To me, and the evidence i have collected, looks like they are trying to get the price down so my brother can purchase the villa For less than it’s worth! They have both lied and scammed me before with mums jewellery etc, etc.
    What can I do? Will caveat help, and when do I lodge it if it will? Please help!


      January 7, 2021 Michael Yardney

      It depends what you mean by “partners” – if your name is on the title you don’t need a caveat – but you should consult an independant solicitor to protect your interests


    Avatar for Andrew Mirams

    October 9, 2020 lucy

    Hi, we have signed the contract for a house that had 7 caveats on it. 5 have been withdrawn and 2 remain. As buyers what can we do now that the settlement date has passed and these caveats still remain?


      October 10, 2020 Michael Yardney

      Your solicitor should not have allowed the property transaction to occur while caveats were still in place – they show someone else has an interest in your property. See your solicitor and get their removal


    Avatar for Andrew Mirams

    October 4, 2020 Nicole

    I have a caveat over a property that the owner of the land is trying to get me to release so he can sell. He is making me false promises to get me to release the caveat, which are coming through from his lawyer but he wont sign an undertaking to legalise this! My question is can my caveat be transferred to my Power of Attorney to resolve as this is affecting my health terribly which is what he wants?


      October 4, 2020 Michael Yardney

      I’m sorry to hear of your issue -Anyone who holds a beneficial interest in a property is able to lodge a caveat


    Avatar for Andrew Mirams

    June 2, 2020 Nicole

    We are the purchaser and supposed to settle 7 days ago, we have been advised there is a caveat due to owed debt, what happens the seller cannot pay the debt? How long should we be waiting until there’s an answer?


      June 2, 2020 Michael Yardney

      Your solicitor should have explained the significance of the caveat before you signed the contract – this is a legal issue – best to ask your solicitors advice


    Avatar for Andrew Mirams

    September 7, 2018 Selena

    We want to put a caveat on my brothers flat as he has a disability and we are worried that he will be coerced to sell and then become homeless. Is there any other way we can ensure he doesn’t sell in the heat of the moment? He has limited understanding of financial matters.


      September 7, 2018 Michael Yardney

      Selena – I understand your concern. While you can’t stop him selling if it is his property, you can put a caveat warning potential buyers you have a financial interest in the property. But I’m not sure that currently you do have a financial interest in it


    Avatar for Andrew Mirams

    May 16, 2018 Ms A Jayne

    Am I able to lease my property if there is a caveat on it?


      May 16, 2018 Michael Yardney

      Definitely – there is no restriction on leasing it, but you can’t sell it until the caveat is removed


        Avatar for Andrew Mirams

        May 17, 2018 Ms Jayne

        Thank you Micheal … that’s excellent help.


    Avatar for Andrew Mirams

    April 27, 2018 Iris

    Hi Michael,
    We have a signed contract and paid a 5% deposit for a property. We are in the process of lodging a caveat on the property. If there is another caveat lodged before us, will we be notified immediately? Also, if the seller has undisclosed debts but the creditor has not lodged a caveat can they collect the debts against the property?
    Thank you


      April 27, 2018 Michael Yardney

      Iris any caveat lodged before you will already appear on the title
      Creditors that don’t have a caveat cannot claim against the property


    Avatar for Andrew Mirams

    March 7, 2018 Tracie

    What if you want to buy a house but it has a Caveat on it. Ive been told to stay away from houses with Caveats is this true?


      March 7, 2018 Michael Yardney

      No -it depends who put the caveat on the proeprty and why – your solicitor will have to make it a condition of the contract of sale that the caveat is removed


    Avatar for Andrew Mirams

    February 14, 2018 Mrs Muzaffar

    Hi. I need a suggestion from you. We have paid 5% deposit of a property and 5% is on settlement day. But now we have came to know that our property had three caveat and in which 2 of them had withdrawn. And only one is remaining and is not leaving his caveat. Owner has offered us to move into that property with no cost(like rental fees until settlement day) because they have already delayed the settlement date to more 25 days. What is your suggestion?? Should we move into that property with no cost until the settlement day and then pay rest of 5% or should we give them notice of default and wait for the court to decide or leave everything and wait for the settlement date to be crossed.
    Thank you.


      February 14, 2018 Michael Yardney

      Sorry, I can’t give you advice condiering I don’t know all the circumstances – why isn’t he caveat being removed? What right does the caveat holder have over the property etc. Please ask your solicitor to protect yourself


    Avatar for Andrew Mirams

    February 3, 2018 Sharon watterson

    my husband and i have a joint mortgage. My husband has a failed business in which he owes the owner an amount of rent. My husband signed all the paperwork regarding the business legal documents leases agreement. My name isnt attached to the business in any way. The owners put a caveat on our house including me. Is this legal? Can a caveat be put on a joint property where only one person owes the money and can the other take legal action regarding the caveat being put on.


      February 4, 2018 Michael Yardney

      You better get a legal opinion, but my understanding is your husband’s creditors are trying to scare him.
      He owes them money – but they have no interest in the house so are NOT entitles to put a caveat on it, unless he gave it as security


    Avatar for Andrew Mirams

    September 26, 2016 Mark Wilson

    What about the process of using caveats to protect your own property from creditors?
    Can you explain the pros and cons of this process?


      September 26, 2016 Michael Yardney

      Mark. You can’t put a caveat on your own property. It’s has to be a third party whomhasna financial interest in your property


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