The importance of a Purchaser’s Caveat

In property law, a Caveat is a document on a Certificate of Title registered by someone, that has a caveatable interest in the property. They are known as the Caveator.

A Caveat is a document any person with a legal interest in a property can lodge with Land Use Victoria. After registration, a caveat note appears on the title giving notice to the world at large that a third party might have rights over the property.

If a Caveat has been registered on a property, the Caveator will be notified of any attempted transactions with the property. In most circumstances, the Caveator is required to provide consent in order for the transaction to occur.

Essentially, a Purchaser’s Caveat is a Caveat registered on a Certificate of Title when a Purchaser has entered into a Contract of Sale to purchase the property. In this instance, the Caveator is the Purchaser. The Caveat restricts the property being dealt with prior to settlement without the Caveators knowledge and therefore, protects the Purchaser’s legal interests in the property.

It is important for a Purchaser to lodge a caveat, especially if a deposit has been paid and more so if the deposit has been released or is to be released. Once a deposit has been paid by the Purchaser, they have an equitable and by reason of that a caveatable interest in the property sold to them. Without a caveat, the risk for the Purchaser is that the Vendor may retain the deposit and possibly sell the property to someone else.

If a Purchaser enters into a Contract of Sale to purchase a property and they do not register a Caveat, they risk someone else attempting to transact on the Certificate of Title and losing their deposit.

If you require more information on Purchaser’s Caveats or would like assistance with your purchase matter, please contact our office on 03 9707 1155.