What is a caveat? It is a formal registration of a legal or equitable interest in land. The Registrar-General is required to send you written notice if a party has lodged a caveat on your land. Lodging a caveat can prevent further dealings with a property until it’s removed. In this article, we will discuss the two key methods to remove a caveat in New South Wales.
Formal Withdrawal
The formal withdrawal process requires the caveator to decide to withdraw their caveat. To do this, the caveator (or their solicitor) must complete and sign a Withdrawal of Caveat form and lodge this together with the fee.
The following individuals can also apply to withdraw the caveat:
- if joint tenants hold a caveat and one caveator dies, the surviving caveator;
- the executor, administrator or trustee of a deceased caveator;
- the Australian Securities and Investment Commission (ASIC); and
- a trustee when the caveator is an infant or is deemed mentally incapable.
This process is only suitable where the caveator wishes to withdraw the caveat. Where the registered owner, or another party with a relevant interest, wishes to remove the caveat, then the other methods set out below should be used.
Lapsing
You may also remove a caveat if it lapses. For example, this occurs when:
- the caveator’s interest is satisfied because another party registered another dealing (e.g. if a caveator is an unregistered mortgagee, her interest in the property will be satisfied if the mortgage is discharged);
- the registered owner or a party with registered interest lodges an Application for Preparation of Lapsing Notice; or
- a party lodges a dealing that the caveat prevents together with an Application for Preparation of Lapsing Notice.
The registered property owner or another interested party may typically use an Application for Preparation of Lapsing Notice to remove the caveat where the caveator will not agree to withdraw formally. The property owner may wish to register another dealing on the land, which the caveat prevents, and seek to apply for the lapsing of the caveat. You must use the relevant LPI form. Once you have lodged the form, the caveat will lapse and expire after 21 days.
Deciding on the process to remove a caveat will depend on the circumstance of your matter. As the registered proprietor of the land, you should keep in mind where:
- the caveator no longer has an interest or wishes to withdraw, they can do so by a formal withdrawal;
- you wish to remove the caveat and consider that there is unlikely to be a dispute, you should file an Application for Preparation of Lapsing Notice;
- your circumstances are urgent, or you anticipate a fight, an application to the Supreme Court may be the best option.
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