Hi all,
I've purchased a property, with settlement due early July 2011. Contracts and everything have been signed.
My solicitor recommended taking out a caveat on the property, which will cost me $250 (including lawyers fees). This seems quite high to me, so I was wondering – is it actually worth it? Will it do anything for me, or is just giving my lawyer a few extra bucks?
Thanks.
The reason for the caveat is that it registers your interest (ie prospective purchase) on the title and prevents it being sold to anyone else. Generally, there is no need for a caveat unless there are major concerns that the contract will not proceed.
Why is you solicitor pushing for a caveat considering that settlement is only 90 days away?
Probably because if I lodged the caveat myself I believe it's < $100, but if they do it for me it's $250? I'm a little skeptical – hence the question!
It seems that solicitors always suggest a caveat these days, I guess more $ for them. The way I look at is how large is your emotional investment? If I was buying my dream home I would probably place a caveat on it. But I always aim to view an investment property purchase as a business deal, if the house gets sold to someone else between placing the contract and settlement (that has happened to me) am I happy to walk away?
The solicitor is making this recomendation to protect YOUR interests, I very much doubt it is a grab for money.
Sum may think that $150 To prepare and lodge a caveat, sure this is relativley simple, is a bit much but ask yourself how much is your own professional services are worth?
No I'm not a lawyer/solicitor but I get tied of people assuming that professional fees and/or trademans charges are just a money grap
If you think your that good just do your own conveyancing
In NSW the law society has recommended that solicitors suggest to the purchasers that they lodge a caveat after exchange because of a recent case called Black v Garnot. In this case a third party lodged a writ over the property relating to some sort of debt. This writ was lodged after the solicitor did the final title search in the morning, but before settlement. This was in a space of about 2 hours.
Because of the writ the lodging party was able to prevent the title being transferred. The purchaser settled, but could not register the transfer. It went to court and it was found that the lodging party held a higher priority to the purchaser. Had the purchaser registered their interest with a caveat then they would have had a higher priority and would have been able to keep the property and to register the transfer.
So if your solicitor did not recommend a caveat and something like this happened then they could be in trouble.
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
Hi Cattaby.
Terry is correct about the Black v Garnot NSW case but these were under what was considered exceptional circumstances. A Caveat is like a form of legal insurance and it as Terry suggested, a way for a lawyer to protect themselves and usually their professional indemnity demands they make mention of it to you. It doesn't hurt to have caveat but if your settlement is fairly straight forward there is probably no need for one. If you feel the need to play it safe (insurance), then do it yourself and save a few bucks!Thanks for the replies all. It doesn't sound like something I will need (everything has been fairly straightforward, and there are no other interested parties), so I think I'll keep my $250 and put it towards a few slabs of beer instead
Cattaby wrote:Thanks for the replies all. It doesn't sound like something I will need (everything has been fairly straightforward, and there are no other interested parties), so I think I'll keep my $250 and put it towards a few slabs of beer insteadhow do you know there are no other interested parties?
It will be very rare to get hit, though it can happen.
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
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