Lodging Caveats – Builders Beware!

What is a caveat?

caveat acts as a warning or formal notice that can be registered with Land Victoria to temporarily halt any dealings with a property.

This can prevent the transfer of a property from being registered on the Certificate of Title and can assist an interested party in claiming legal ownership of a property.

In other terms, a caveat is a useful way to record your interest on the title of a property. The word caveat means ‘beware’, and lodging a caveat on real property warns anyone dealing with the property that someone has priority interest in that property.

What is caveatable interest?

A caveat can be lodged on the title if a person has caveatable interest.

Examples of caveatable interests are:

  • An equitable owner of a property – including persons claiming to have added value to property
  • An interest as a mortgagee (a lender)
  • An interest as someone given a charge – including under a contract
  • An interest under an option to purchase

Caveats in Victoria

If you are dealing with real estate in Victoria and are not aware of caveats, you should ask your lawyer how caveats can be used to protect your interest in the property, and how it can be removed from a Certificate of Title should there be an impact on an intended transaction.

Common scenarios where caveats can be used are:

  • When purchasing a property
  • To secure a charge
  • Pursuant to a court order
  • Where an equitable interest has arisen

Can a builder/contractor lodge a caveat?

It is important to keep in mind that some caveats have limitations.

There is a common misconception that builders/contractors are entitled to a caveat over property if they have not been paid for their works and claim to have an interest in the property as result of their work.

Before lodging a caveat, you must ensure (upon seeking legal advice) that you have a caveatable interest or ‘proper grounds’ to claim an interest in the property. Without this, a caveator may be liable for any loss incurred by the land owner as a result of a caveat.

Section 18 of the Domestic Building Contracts Act 1995 specifically notes that a domestic building contract does not provide builders with an estate or interest in any land for the purposes of Section 89 of the Transfer of Land Act 1958.  

There may be some cases where a builder may lodge a caveat where they have a separate charge or where the Act does not apply.  

Our professional services

Our team at Oldham Construction Lawyers recommend you obtain legal advice on the quickest and most effective way to recover debt and protect your interest.

We are able to promptly assist you with drafting agreements to ensure that your interest is properly protected.

If you believe you may have a caveatable interest over a property or a caveat has been lodged without proper interest please do not hesitate to call Daniel Oldham on (03) 9640 0002, or via email info@oclawyers.com.au

Our team are here to help you with all building and landowners claims and entitlements.