Caveats allow any person with a legal or equitable interest in land (‘caveator’) to lodge a caveat against the property of another person (‘owner’). Caveats are formal notices which are recorded against the title of a property and are used to protect an interest in that property. Essentially, this allows the caveator to suspend any further dealings with a property until there has been a reasonable opportunity for the rights of the parties involved to be ascertained by a court. This means that caveats can achieve the same function as a statutory injunction without the difficulties associated with approaching the court to obtain them.
In Western Australia, caveat applications are lodged through Landgate. The applications must include detailed information regarding:
- the description of the land/property;
- the type of caveat required;
- the applicants’ details; and
- a description of the nature of their claim.
It is important to note that caveats cannot be lodged to protect contractual or personal rights but can only be lodged to protect property interests in land. Additionally, in order to be able to lodge a caveat, a caveator must be able to demonstrate their legal or equitable interest. For example, these interests may include:
- a contract for the sale of land;
- an option to purchase the land;
- a mortgagee or equitable mortgagee;
- a charge over the land;
- the benefit of an easement;
- a lease over the land; or
- an unregistered interest.
Therefore, merely having been in a marital or de facto relationship will not generally alone give an individual an interest in their partner’s land. However, in circumstances where an ex-partner holds a beneficial interest under a constructive trust a caveat may still be lodged. In such a case, it must be proved that:
- there has been a joint relationship which has broken down;
- the owner of the property has benefited from the contributions made by the other party for the purposes of the joint relationship;
- it was not specifically intended that the property owner would retain those benefits without accounting to the other party; and
- it would be unconscionable for the property owner to deny that the other party has an equitable interest in the property.
For example, a de facto husband purchases land in his name and lives there with his de facto wife. During this time together the couple pools their financial resources to pay for the household expenses, which include the mortgage instalments on the property. In such a case, despite the property being owned solely by the husband, the wife’s contributions to the mortgage might be considered to create a constructive trust over the property. This may give her an equitable interest over which a caveat could be lodged. A court order may be required first to properly lodge a caveat.
Essentially, in situations where the caveator can show that they made contributions towards the property, such as paying the mortgage or paying for renovations, this may be enough to create an interest that can be protected via caveat. It is especially important to obtain legal advice before attempting to lodge a caveat, to ensure you have a caveatable interest and that the proper procedure is followed. Likewise, if you want to defend against a caveat being lodged, you must obtain advice as to the legality of the caveat and what to do next.
If no valid legal or equitable interests exist, then the owner of the property is entitled to have the claim removed. Where an application is made without a valid interest, indemnity costs may be ordered against the party who lodges a caveat over a property even if it is subsequently withdrawn.
Do you need legal advice concerning a caveat on your property? Our lawyers can provide you with comprehensive legal advice. Contact our Office for an appointment today.
Please note that the above is general information and should not be relied upon as legal advice. All situations are different and legal advice must always be tailored to the specific situation.