Hi,
I'd appreciate some advise on the issue of lodging a caveat with the Titles Office …….
I'm about to settle on my first IP in the next 3 weeks. My conveyancer has asked if I wanted to lodge a Caveat on the title of the IP. Is this something I should consider? (was not made aware of this when I purchased my PPOR a few years back!).
I understand that it will protect my legal interest in the property and no dealing will be allowed to proceed without notification to myself. Is there more to this? Is there a limited life to the caveat or is it in placed for as long as I own the property?
Thanks!
newday7
Normally when you buy property the lender has a kind of caveat of sorts on the property as a mortgagee .
If you were to lend a portion of your property to a buyer and have them borrow the rest from a bank you would have a caveat on the amount your lent out to protect your interests. Or if the property is joint owned it could protect your 50% interest.http://www.brokernews.com.au/news/caveat-loans-still-on-the-table/47239
http://www.lawyersconveyancing.com.au/caveat.asp
http://www.lpma.nsw.gov.au/about_us/faqs/whats_a_caveatThanks heaps for the links, it is certainly very informative. I'd definitely consider lodging a caveat.
Everyday I learn something new!
No, it is to do with establishing your priority.
The person selling the property may be facing money problems and it is possible that someone may lodge a caveat or a writ over the property after you have exchanged contracts and before you settle. If this occurs they could have priority over you in taking the property. Now it is law society policy that all solicitors should advise clients to lodge a caveat after exchange to establish their interest.
see the recent case Black v Garnot where this happened.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Thanks Terry. I now understand this more.
As I don't know the financial state of the person selling the property (except that she has moved interstate), I suppose, protecting my interest is important ……..somewhat like buying "insurance" for the "unexpected"? My conveyancer is charging $220 for me to lodge.
newday7
NewDay, as your property will be an IP, the cost of lodging a caveat will be an expense that can claimed against your tax liability. Speak to your accountant to find out more.
Good luck with the settlement – remember to switch on all the appliances and check every nook and cranny including garages, gardens and storage spaces before you settle!
Lodging a caveat over a property you have signed a contract to buy is a step that has been recommended by lawyers for years. As Terry says, a caveat means that a vendor can't then do anything to the property between you signing the contract and settlement without getting your permission. From a legal point of view, it is a good idea because it protects your interests.
However, from a practical point of view, if someone else slaps a caveat on the property between signing and settlement, all that will happen is that the sale won't proceed and you will get your deposit back. You won't have suffered any losses except the cost of inspections and some conveyancing costs.
I have bought and sold dozens and dozens of properties and have never used a caveat or had one used on a property of mine.
It is probably good legal practice but rarely used in the practicalities of property wheeling and dealing.
Cheers
K
Good for generating legal fees anyway!
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
You must be logged in to reply to this topic. If you don't have an account, you can register here.
