On 11 October 2021, the Real Property Amendment (Certificates of Title) Act 2021 commenced, which abolished the Certificates of Title (CTs) and the control of the right to deal (CoRD) framework. All existing CTs have been cancelled and CTs will no longer be issued. Existing CTs will not need to be produced, and CoRD holder consent will not be required, for a dealing or plan to be registered. All existing Guidelines subject to this change are currently being reviewed and will be updated to reflect these changes. For further information regarding the abolition of CTs, please see https://www.registrargeneral.nsw.gov.au/property-and-conveyancing/eConveyancing/abolition-of-certificates-of-title

What is a caveat?

A caveat is a form of statutory injunction provided for under the Real Property Act 1900 recording a claim to an estate or interest in land. A caveat prevents the registration of dealings and/or plans (except for certain statutory exceptions and any specifically permitted dealings).
The party that records a caveat on title is known as the ‘caveator’.
Only those claiming an eligible estate or interest in the land can record a caveat on title. If a caveat is lodged without reasonable cause, the caveator may be liable to pay compensation to any person who suffers a pecuniary loss as a result.

How to lodge a caveat

Caveats must be lodged with NSW LRS by a subscriber (who will generally be either your lawyer or licensed conveyancer).
It is important that you seek legal advice before lodging a caveat. NSW LRS cannot provide you with legal advice.

Common uses of caveats

Caveats may be lodged in several circumstances, including (but not limited) to:

  • protect an interest under a contract for sale (purchaser’s caveat).
  • secure a loan. A bank or other lender can place a caveat on title to make others aware of their financial interest in the property.
  • protect an interest such as a lease or mortgage which has not been registered.
  • prevent the registration of a delimitation plan.
  • protect an estate or interest in land that cannot be protected immediately by the registration of another dealing like a transfer or mortgage, eg a beneficial interest in a trust.

NSW LRS’s role with caveats

NSW LRS is not required to be satisfied that the caveator is in fact entitled to the estate or interest claimed in the caveat or otherwise as to its validity. NSW LRS cannot prevent a caveat being lodged if it meets the lodgment requirements.
NSW LRS is required to send a notice to all registered proprietors affected by the caveat to the address specified on the caveat. The sending of notice ensures the registered proprietor is aware of the caveat and provides an opportunity for the taking of any necessary steps to have the caveat removed or take any other action after obtaining legal advice.
 

Removing a caveat on a property title

If there is a caveat on your title that you wish to have removed, it is important that you seek legal advice on how to manage or remove the caveat. This includes:
 

Lapsing of caveat

A caveat lapses when:

  • the interest claimed under the caveat is satisfied by the registration of another dealing; or
  • a lapsing application is lodged with NSW LRS by a subscriber on behalf of a registered proprietor of an estate or interest affected by the caveat. The caveat will lapse, or partially lapse, once a period of 21 days has passed from the satisfactory service of the lapsing notice on the caveator unless the caveator has lodged with NSW LRS an order of the NSW Supreme Court extending the operation of the caveat.

Withdrawal of caveat

A caveat can be formally withdrawn by a subscriber lodging a Withdrawal of Caveat form with NSW LRS.

Obtaining the caveator's consent

A caveator may not want their caveat removed but may not object to the lodgment and registration of a dealing or plan. For example, a caveator claiming as an unregistered mortgagee may not object to a lease being granted over a property. In these cases, the caveator can give written consent to allow registration of the subsequent dealing.
The written consent must satisfy NSW LRS’ formal requirements  – see caveator consent.
Where a caveator consents, the caveat remains on title and a notification that the caveator consented to registration is entered and the other dealing is registered.
When the caveator consents to the registration of a dealing, they also consent to the exercise of any powers that the owner of that interest may gain by registration. For example, where a caveator has consented to the registration of a mortgage, the caveat will not prevent the mortgagee from exercising the power of sale under the mortgage.

Order of Court

Where a caveat needs to be removed on a more urgent basis, an order of the Supreme Court may be obtained for its removal. A sealed copy of the order must be lodged by a subscriber with NSW LRS by attaching it to a Request (form 11R). The court may also order the payment of compensation by the caveator to a person who suffers a pecuniary loss because of a caveat.

Find out more

For more information, visit the Registrar General's Guidelines on caveats or contact your legal advisor.
 

Publication Date: July 2024