Before we get into what exactly constitutes an improper caveat, let’s first define proper, or lawful, caveats.
What is a proper caveat?
A proper caveat is one that protects the legitimate interests in land of the person who lodged it (the caveator). Lawful caveats arise when there is an agreement by one party to allow another party to lodge a caveat. Proper and lawful caveats arise when:
• there is a written agreement that allows a party to lodge a caveat to secure an interest (often called a ‘charging clause’);
• a trustee in bankruptcy has lodged the caveat to protect a property that forms part of the bankrupt’s estate;
• where one party is the registered proprietor of land but where two parties have contributed to the purchase price;
• when parties have contributed jointly to the development of land or property but where only one party is the registered proprietor;
• in instances of fraud, for example, where an employee steals money from their employer and uses that money to buy land;
• a person has been promised an interest in land and acted to their detriment or forgone opportunities because of that promise; or
• for the purposes of securing finance where there is an agreement for a caveat to be lodged in the financing agreement.
What is an improper caveat?
Also referred to as a wrongful caveat, an improper caveat occurs when it is lodged to do something other than secure an ‘interest in land’. Most commonly, this occurs where a caveat is lodged to recover an unsecured debt or to bully the owner of the land into paying an unlawful or disputed sum of money. Common examples of what constitutes a wrongful or improper caveat arise when:
• someone lodged a caveat without any written agreement or any permission for them to have done so (often to pressure you into paying an unsecured debt or disputed sum of money);
• you have fully paid the debt or money the caveat was to secure but the caveat has still not been removed; or
• in the context of a family law dispute where the caveator has not contributed to the purchase price of the property over which the improper caveat has been lodged.
Caveat Removal Victoria offers a number of services for improper caveat removal in Victoria. The right service for you depends on the nature of the caveat and the urgency with which you require its removal. Find out more about this at Our Services page.
If you have decided to no longer tolerate an improper caveat on your title, please click here to see if our caveat removal services are right for you.
