What is a Property Caveat and How Does it Work

What is a Property Caveat and How Does it Work

When dealing with real estate transactions, you’ve probably heard of the term “caveat.” A property caveat is one of the most recognisable instruments being used by many owners and property agents to any piece of land. However, they are also one of the most misunderstood concepts by many. In this guide, we discuss how a property caveat might affect your transaction and what you can possibly do about it.

What is a Caveat?

A caveat is a notice seeking to prevent something from happening, usually a transaction, contract or other encumbrance on land, generally to protect the party who files the caveat. The purpose of a caveat is to ensure that a party that seeks to register or foreclose on a document does not do so before the party filing the caveat has had an opportunity to properly protect their interests.

How Does a Caveat Affect a Transaction?

When the seller and purchaser enter into a contract of sale prior to the exchange of contracts, the buyer can apply to register a notice of its intention to complete the purchase. The disclaimer is a notice that is used by a purchaser to cover themselves in the event that any third party has any cause to come forward with an interest in the property within 28 days of its completion.

The caveat prevents the purchaser from becoming the outright owner of the property until they have received confirmation that no third party has any interest in the land or until 28 days from the date of the contract unless the seller and purchaser can agree on an alternative date. If the seller or purchaser does not already have a caveat in place when a contract of sale is signed, the seller or purchaser must apply for one within 14 days of the contract being signed.

What Happens if a Caveat is Put in Place?

If the seller and purchaser haven’t already put a caveat in place, the seller must apply for a caveat. If either the seller or the purchaser has already put in place a caveat, the other party must file a notice of waiver in order to proceed with the transaction.

The process will then be the same as when neither the seller nor the purchaser has a caveat in place. This is when the purchaser will move forward with the transaction and will not be able to complete their purchase until they have been confirmed that there are no third party interests in the property.

How Can a Caveat Affect Me?

If you are a property owner and you are considering selling your property, and a caveat is put in place, there are several scenarios that can happen. You may be able to request that the property agent or personal representative agree to accept compensation in advance, or the property owner may be able to take the matter to court. This is known as disclaiming a caveat.

In the case of a contract of sale that has been signed, it is possible for a property owner to agree to cancel the contract if a property owner has had a valid caveat in place for more than six months. This is known as releasing a caveat.


Caveats provide an important service to the general public. It can help ensure that all parties involved in a real estate transaction are aware of any potential claims or rights to a specific piece of land. If you are planning to sell your property and you are aware of any potential claims against your property, you can protect yourself by applying for a property caveat.

Not familiar with the legal aspect of your property transaction? You need help from a professional who specialises in conveyancing and business. This is where Bickell & Mackenzie comes in to help. We are a family-owned law firm that operates in the Redlands area. If you need the help of conveyancing lawyers for your property transaction, our legal team is here to assist you. Contact us today to schedule a consultation.

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