This is the third part of the SettleIT education series supporting practitioners to navigate the e-settlements and e-conveyancing landscape. See part one and part two. This article does not constitute legal advice. It is for general information purposes only.
Caveats continue to be a complex topic in the conveyancing world, and while they are not always a necessity, failure to lodge a caveat can result in the loss of finances.
SettleIT licensed conveyancer, David Johansson, breaks down each caveat type, when they can be used and what is required.
What is a caveat?
A ‘caveat’ in Latin means ‘beware’, and in terms of an Australian property, a caveat on Title serves as a warning that someone, other than the current registered proprietor, is making a claim or has an ongoing interest against the property affected. There are several reasons why a caveat is lodged against a property including court orders, contracts, mortgages and bad debts.
For lawyers and conveyancers processing NSW property matters, to enable a caveat to pass scrutiny and be successfully lodged at the Land Registry Services (LRS) New South Wales, the person lodging the caveat needs to be able to prove that they have, what is termed as, a caveatable interest. A caveat may be lodged by any person, including the Registered Proprietor, who claims an estate or interest in Torrens Title Land.
Caveats are generally used in conveyancing transactions to protect a person’s interest in a particular property. There are three new “specialised templates” for lodging standard forms of caveat including:
- a Purchasers Caveat
- a Registered Proprietors Caveat, and;
- a Caveat on behalf of the Public Trustee and Guardian.
Purchasers Caveat
A Purchases Caveat is generally used to protect someone’s interest in a property once they have entered into a contract. It serves as a safety barrier to deter possible actions by other persons who may wish to transact on the future property without you firstly removing the caveat. The LRS NSW states that:
This caveat only prohibits the following actions:
- The recording in the Register of any dealing other than a plan affecting the estate or interest claimed by the Caveator,
- The recording in the Register of a Writ affecting the estate or interest claimed by the Caveator, and
- Where further actions are required to be prohibited, the Standard Caveat Form should be Lodged
Registered Proprietor Caveat
A Registered Proprietor Caveat is a new option which has recently been introduced. It may be used by property owners to alleviate any fears that clients may have relating to the introduction of electronic Certificates of Title in NSW. Previously, if a person owned a mortgage-free property, they could hold their original Deed in a secure location with the knowledge that it was required for anyone to transact against the property. With the introduction of electronic Certificates of Title, the onus is now on the transacting solicitor/conveyancer and ELNO subscriber to perform a stringent Verification of Identity (VOI) on a client, prior to transacting against their property. If done correctly, this VOI should alleviate any potential fraudulent transactions.
NSW Trustee and Guardian Caveat
Due to the high volume of transactions lodged by the NSW Public Trustee and Guardian, a NSW Trustee and Guardian Caveat option is now available to enable the fast and efficient creation and processing of caveats by staff or agents of the NSW Public Trustee and Guardian.
The intricacies of the caveat process can prove quite daunting, and when paralleled with the electronic lodgment mandate that came into effect in NSW in 2021, it is understandable to seek some support and guidance on caveat matters. If you are looking for support on lodging any or all three caveats on behalf of your clients, the SettleIT team have over 100 years of combined experience to move your property matter along smoothly. Should you require our assistance in lodging caveats or any electronic dealings, contact the SettleIT team for consultation today.
