What Is a Caveat, and What Does It Do?

A caveat is the emergency brake of the Torrens system. It does not give you an interest in land — it stops someone else dealing with the land while your claimed interest is determined.

Section 82 — who may lodge one

The threshold is claiming an estate or interest in the land. A caveat is not available to someone with a mere personal grievance, a contractual claim for money, or a hope of acquiring the land one day. Typical caveatable interests include a purchaser under an executed contract of sale, an equitable mortgagee, a beneficiary under a trust of the land, and a person claiming under an unregistered transfer.

Sections 83 and 84 — scope and form

A caveat may be expressed to operate:

• absolutely, or until after notice of intention to register has been served under section 94; and
• to forbid one or more instruments or classes of instruments.

It shall be in the approved form and signed by the person lodging it, or on whose behalf it is lodged, or by their lawyer or agent.

Section 85 — acceptance by the Registrar

Section 86 — the restriction on dealings

• While a section 82(a) caveat is in force, the Registrar shall not register an instrument whose registration the caveat forbids.
• Unless the instrument is endorsed with the consent of the caveator, in which case it may be registered.
• While a section 82(b) caveat is in force, the Registrar shall not amend the certificate of title to which it relates.

On receiving a caveat, the Registrar must notify the person against whose right to deal the caveat is lodged — or, for a section 82(b) caveat, the person who applied under section 153. Notice may be sent by prepaid registered post to the last known address.

Section 91 — the three-month lapse

And once it has gone, section 92 shuts the door: where a caveat lodged by or for a person has lapsed, or the Court has ordered its removal, that person shall not lodge another caveat on substantially the same grounds. You get one.

How a caveat comes off

Section 89 lets the Registrar cancel a caveat where it is proved to his satisfaction that the caveator’s estate, interest or claim has ceased, been abandoned or withdrawn; that the caveator’s rights are satisfied or arranged; or that the nature of the claim does not entitle the caveator to forbid the dealing.

On that last ground the Registrar must first cause at least seven days’ notice to be served on the person who lodged the caveat — an opportunity to justify it.

Section 90 — lodging without reasonable cause

Caveats are sometimes used tactically — to freeze a sale, or as leverage in an unrelated dispute. Section 90 is the answer. A caveator who lodges without a genuine, arguable claim to an estate or interest can be sued for the loss caused: a sale that fell through, finance that could not be drawn, costs thrown away.

Before lodging, be able to state precisely what estate or interest you claim and what document or transaction gives it to you.

Practical guidance

1. Identify your interest precisely before lodging, and use the approved form.
2. Confirm acceptance — the caveat does nothing until the Registrar notes acceptance.
3. Diarise three months from acceptance. Decide early whether you will sue.
4. If you sue, notify the Registrar in writing — both steps are required.
5. If you are the registered proprietor and a caveat blocks your sale: ask the caveator to withdraw; if refused, apply to the Registrar under section 89 or to the Court under section 88; and consider a section 90 damages claim if it was lodged without reasonable cause.
6. Remember consent registration. Under section 86(2), an instrument endorsed with the caveator’s consent may be registered — often the quickest commercial solution.