Lodging A Caveat Over Property in Queensland

Lodging A Caveat Over Property in Queensland


AITKEN WHYTE LAWYERS BRISBANE

PROPERTY DISPUTE LAWYERS AND SOLICITORS FOR BRISBANE AND SOUTH EAST QUEENSLAND

What Is a Caveat?

A caveat is a document that a party may lodge on the title of a property with the Land Titles Office.

Broadly speaking, a caveat operates to:

  1. prevent a property being sold or dealt with; and
  2. give notice of an interest against the property.

Use of A Caveat in Debt Recovery

A common misconception is that if a debtor owns property, you can lodge a caveat over their property.

While you cannot lodge a caveat simply because someone owes you money, you may have a right to lodge a caveat if:

  1. a property owner has entered into a contract agreeing to “charge” their property in your favour; or
  2. you are the “beneficial owner” of the property under a constructive or resulting trust.
Charge

A charging clause is a common clause in credit agreements. Many companies have a charging clause in their standard contracts. This gives them security over their debtors’ property if the debtor fails to pay the amount owed.

The company might lodge a caveat against the title of a debtor’s property if they default on the agreement.

The caveat in this circumstance would rely on the “charging” clause in the contract. Such a clause might have words similar to:

the client agrees to charge all their real and personal present and after-acquired property in favour of the company”.

These types of clauses give the company (or person) an equitable interest over the property. The clause also likely gives them the right to lodge a caveat against the title of the property.

We have acted for both parties in this situation, including:

  • companies and individuals lodging a caveat over a debtor’s property to assist in recovering the debt; and
  • individuals who have had a caveat lodged over their property.

Our range of experience positions us to understand both sides of a dispute. This assists us to know the likely steps the other party might take and to assist to resolve the dispute.

Beneficial Owner

A constructive trust or resulting trust may arise where:

  1. a property has a particular registered owner; and
  2. due to the conduct of the parties, someone else ought to be recognized in equity as the beneficial owner.

These are complex areas of law. Our article on constructive trusts explains when someone may become a beneficial owner.

Lodging A Caveat

Our civil litigation lawyers have experience preparing caveats on behalf of clients.

A caveat is lodged with the Department of Natural Resources and Mines at the Land Titles Office.

The Land Titles Office requires a lodgment fee to be paid. You can calculate the fee using their online fee calculator.

The Land Titles Office will assess your caveat. It will be requisitioned if it does not include all the required information. The Titles Office, however, will not determine if you have an interest in the property. Nor will they determine whether any interest held is a “caveatable interest”. Whether an interest is capable of sustaining a caveat is a determination for the Courts.

After Lodging a Caveat

Once you lodge the caveat, you have at most 3 months to commence Court proceedings. It is necessary to start Court proceedings to maintain the caveat (as otherwise, it will lapse). If a caveat is lodged with the consent of the owner, in most circumstances (but not all), Court proceedings are not required to be started in the 3-month period.

This time can be shortened if the owner of the property issues a notice to you to commence proceedings. If you are issued with a notice, you must commence Court proceedings within 14 days.

The notice can be given pursuant to section 126(2) of the Land Title Act 1994 (Qld), which provides:

  1. The caveatee of a caveat (property owner) to which this section applies—
    1. may serve on the caveator (party claiming an interest in the property) a notice requiring the caveator to start a proceeding in a court of competent jurisdiction to establish the interest claimed under the caveat; and
    2. if the caveatee serves a notice under paragraph (a)—must, within 14 days after the notice is served, deposit an instrument notifying the registrar of the service of the notice.

You should be prepared to commence Court proceedings quickly after lodging a caveat.

Commencing Court Proceedings

If your caveat lapses, you cannot lodge another caveat claiming the same interest without leave of the court. It is therefore important to start proceedings in time.

Your Statement of Claim must establish your interest in the property. This is critical as otherwise your caveat may be vulnerable to being removed by the Courts.

If you have lodged a caveat and need to start proceedings, our litigation lawyers can assist. We are experienced in drafting complex pleadings. We will be able to expertly set out your interest and establish your claim.

To ensure enough time to draft and file your Claim, you should contact a lawyer as soon as possible. If your caveat will soon lapse, however, we can take the necessary steps to maintain it in a short period of time.

Other Ways Your Caveat May Be Removed

Other parties with a registered interest in a property will receive notice of a caveat. This will include:

  • the registered owner(s) of the property; and
  • any registered mortgagees on the title of the property.

The registered owner may apply to Court to remove the caveat without notice to the caveator. We have written about assisting a caveatee to apply to the Supreme Court to have a caveat removed.

The caveat may be removed by the land titles Registrar, or by the Court.

The financial liability for lodging a caveat without a valid interest in a property can be great.

If the Court determines your interest in the property did not justify the lodgment of a caveat, you may have to pay:

  • the property owner’s legal costs, for example of applying to have the caveat removed; and
  • any loss or damage suffered by the property owner.

This can be significant. For example, if a sale of the property fell through due to the caveat, the owner may be able to pursue you for their losses.

As such, it is important to seek legal advice to ensure you have a caveatable interest prior to lodging a caveat. Our civil litigation lawyers have extensive experience in property disputes. We will advise you on the benefits of a caveat against any other options available.

Focused on Results

Whether an interest exists sufficient to lodge a caveat can be complex. Following lodgment, your Statement of Claim is just as important as the caveat itself.

Seeking legal advice can ensure you get these things right and avoid an adverse costs order. Engaging an experienced firm will also give you the best chance of success.

Aitken Whyte Lawyers Brisbane are focused on results.

Our litigation lawyers have extensive experience in:

Speak to an expert to ensure you are informed about your options. We can review your contract or a background of events and advise you on the best way forward.

To speak with one of our litigation lawyers call 07 3229 4459 or send us an email. We are happy to discuss your situation and how we may be able to assist.

Office Location and Contact Details

Brisbane

Aitken Whyte Lawyers Brisbane
2/414 Upper Roma Street
Brisbane QLD 4000

Ph: 07 3229 4459
Fax: +617 3211 9311
E: enquiries@awbrisbanelawyers.com.au