Caveat to Protect Real Property

Any dealing with land (real property) such as a sale, lease or mortgage must be registered with the relevant Land Titles agency in each state or territory. A caveat is a type of statutory injunction that acts as a warning to anyone wanting to dispose of the property that a person (the caveator) has an interest in the property. Lodging a caveat on a property is a way of protecting one’s interest in it by preventing the person whose name the property is in from dealing with it in a way that causes them a detriment. This article outlines how caveats can be used to protect real property after a separation.

What is real property?

Real property includes residential homes, farms, apartments and vacant land as well as business and industrial property. Real property can be owned by:

• an individual;
• two or more individuals together;
• a company;
• a trust.

Should a caveat be lodged over property after parties separate?

Not all real property owned by parties to a relationship or a marriage is in the joint names of both parties. The real property may have been owned by one party before the relationship began or the parties may have decided to register the real property in one party’s name only, such as for taxation reasons. If real property is owned by one party when the parties separate then this may be problematic because the party that owns the property can deal with it without the other party knowing.

Property law enables a person who has an interest in real property to lodge a caveat against the title. A caveat essentially prevents any dealing with real property by notifying the party that lodged the caveat about an intended dealing with the property. It is common that a separated party would lodge a caveat against the real property of the other party. The fact that a party’s former relationship partner or spouse is the owner of the real property is not sufficient for a caveat to be lodged.

Alternatives to lodging a caveat

Instead of lodging a caveat, a separated party should consider if they should obtain a court order preventing the real property from being dealt with and for a caveat to be lodged. Factors to consider include:

• the value of the real property;
• if the real property is owned by the other party jointly with another person such as his/her mother or father;
• the total value of the other assets available for division;
• the legal costs associated with obtaining an order;
• if the other party refuses to not sell the real property before finalisation of property settlement.

A party should not automatically lodge a caveat over real property owned by their former partner or spouse without carefully considering if the caveat can be lodged.

The experienced family law team at Armstrong Legal can provide advice about the need to lodge and the risks associated with lodging a caveat. Contact Armstrong Legal.