Caveat

In the context of real estate, a caveat acts as a legal warning sign for a piece of land or property. It's a formal notice telling everyone that a person or organisation has a special interest in that property.

What is a caveat?

In the context of real estate, a caveat acts as a  legal warning sign for a piece of land or property. It's a formal notice telling everyone that a person or organisation has a special interest in that property. Once a caveat is filed, it limits any actions related to the property, including selling, transferring, or adding additional financial obligations without the owner’s permission. 

How long does a caveat last? 

In Australian states such as NSW, a caveat generally lasts 21 days from the date the notice is served. However, the party filing the caveat has the option to extend its duration beyond the initial 21-day period. 

When would a caveat be used? 

Caveats are typically lodged for various purposes, including: 

  • Preventing incoming interests: to obstruct the registration of an incoming interest or transaction by other parties (often used by owners of unencumbered land to protect their property when other safeguards like mortgages are absent).
  • Protecting contractual interests: to safeguard an interest established under a contract for sale, known as a purchaser’s caveat.
  • Securing loans: financial institutions, such as banks, may use a caveat to inform others of their financial interest in the property when securing a loan.
  • Safeguarding lease or mortgage interests: to protect established interests like leases or mortgages.

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