As you may be aware, Section 79 (for married couples) and Section 90SM (for de facto relationships) of the Family Law Act 1975 (The Act) grants the power to the Court to make orders redistributing the property of parties to a marriage or a de facto relationship.
This means that upon separation you and your former partner will be able to make a claim against any property registered in each other’s names. All assets in your former partner’s name, your name or held jointly will form part of the property pool for subsequent division pursuant to the Act.
We have previously discussed that there are several ways of protecting your interest in the matrimonial assets, which are not registered in your name. Perhaps, one of the most commonly used ways is by lodging a caveat against the other party’s property. However, lodging a caveat without reasonable cause may present some risk to you and may land you and your solicitor in some hot water.
A caveat is a method to assert priority over any person wishing to make a claim against the caveated property. This means, for instance, that one cannot sell or deal with a property while there is a caveat lodged against that property. As per Hall v Richards (1961) 108 CLR 84 a caveat does not create a right in the property, but rather it protects your interest in the property from being superseded.
Steps to Lodge a Caveat
A caveat is a cost-effective and simple way to protect your interest in a property. Lodging a Caveat in NSW requires a solicitor or conveyancer.
At Surge Legal we have expert Lawyers prepared to provide you legal advice as to whether a Caveat is suitable for your matter. The steps of lodging a caveat are outlined on the NSW Land Registry Services and are as follows:
Step 1. Engage a solicitor or conveyancer to prepare a caveat for electronic lodgement, or download and complete the caveat form and relevant exception form in hard copy.
Step 2. Lodge caveat and relevant exception form, electronically through your solicitor or conveyancer, ensuring fees are paid.
Step 3. NSW LRS examines the documentation provided. Particulars of the estate or interest claimed must be set out. In addition, details of any instrument and/or facts that support the claim must be stated.
Step 4. The Register is updated to record the lodgment of the caveat if it meets the lodgment requirements. Once processed, the caveat is recorded against the title on the Register.
Step 5. NSW LRS provides notice of the caveat back to the applicant and also sends a notice to the registered proprietor of title if they are not the caveator.
Your caveat application may be refused if the documents have incorrect representations relating to the reference of title, full name(s) and address(es) of the proprietor(s) or if they aren’t accompanied by the correct documentations. This is why we recommend you contact our offices to ensure your caveat process goes smoothly and without any issues. Again, it is important to note that any fraudulent, baseless or mischievous claims are punishable by compensation provisions, and you may be liable to pay other side’s costs and damages as a result of lodging a caveat without sufficient grounds.
You must hold a proprietary interest in the property to be able to lodge a caveat. However, there are circumstances that allow a caveat to be placed on a property without having your interest registered on any documents. We will delve into these circumstances below.
One circumstance where a caveat can be lodged without registered interest is if there is a claim in implied trust. This means that you may have contributed to the purchase of the property, but you have not been noted on the title. This could also mean that you have contributed significant amount of money towards a renovation. If you can show that you have contributed a substantial amount to the property but are not on the title, you may have a basis to secure the property by way of a caveat.
If your former partner has misappropriated money from you to purchase property, you may also have a caveatable interest in the property. For example, if you and your former partner held a company and your partner took money from the company to purchase a property without your knowledge, this may be sufficient to establish your caveatable interest.
In NSW Section 74F outlines lodgement of caveats against dealings, possessory applications, plans and applications for cancellation of easements or extinguishment of restrictive covenants. Notably:
1. Anyone who claims to be entitled to a legal or equitable estate or interest in land by virtue of any unregistered dealing or otherwise, under the provisions of the Act can lodge a caveat.
2. Any registered proprietor of an estate or interest who, because of loss of a relevant certificate of title or some other document relating to the interest, fears an improper dealing with the interest by another person.
3. Any person who claims to be entitled to a legal or equitable interest in land that may be exposed to a possessory application.
Furthermore, per S 74F, anyone claiming an interest pursuant to restrictive covenants or easements may also lodge for a caveat to be imposed.
Per ss 74G and 74Q of the Real Property Act, if the caveat complied with the Real Property Act, then the caveat is registered and the Registrar is not required to check the validity of the claim in the caveat.
Per s 74H, the effect of the caveat prohibits any lodgment of any document or dealing affecting the caveated land if the lodgment or dealing affects the caveator’s interest in the property. S 74H(5)(a)-(z) outlines 26 categories of documents and dealings which caveats cannot prevent the registration of. A caveator can provide consent for a lodgment of document or dealing to be registered against the property despite their caveat being imposed. It is important to note that if there are dealings or documents pending at the time of the registration of the caveat, the caveat cannot prohibit the registration of the pending dealings or documents.
Per ss 74I and 74J, Caveats can lapse one of two ways, on the lodging of a dealing after the caveat is registered and on applicated by the registered proprietor. Either way, they must follow a process as follows:
1. An application is made to the New South Wales Land Registry (NSW LRS) by way of (form 08LX) to prepare a lapsing notice.
2. The applicant has 4 weeks to serve the lapsing notice.
3. The applicant shows sufficient evidence of service to NSW LRS.
4. The caveator has a 21 day from the date of service to obtain an order of the Supreme Court of New South Wales and lodges the order with the NSW LRS extending the operation of the caveat.
5. If the applicant fails to show sufficient evidence of service, the lapsing notice has no effect.
6. The caveat lapses if the caveator fails to obtain an order from the Supreme Court and file with the NSW LRS.
Things you should prepare when giving your legal representative instructions relating to preparing a caveat on your behalf:
· Clearly identify the land you wish to lodge the caveat upon, including your interest in the land.
· You should note that your caveat cannot impose restrictions on parties other than your spouse if you are lodging the caveat to register your interest prior to or during Family Law Property matters.
Within NSW per s 74O of the Real Property Act imposes restrictions on lodging any further caveats on a title, stating that you must obtain a court order to be able to lodge another caveat if a prior caveat has lapsed.
It is important to remember that lodging a caveat without reasonable cause can lead to the affected parties seeking compensation for any pecuniary losses per section 74P of the Real Property Act.
In weeks to come we will address the elements that needs to be established in separation matters to protect a lodging party against the application of Section 74P(1)(a) of the Real Property Act, as this topic deserves a whole separate mention.
At Surge Legal we are able to assist you with lodging a caveat on your behalf provided you have a caveatable interest. During our initial free consultation with you we will assess whether or not you have a caveatable interest in the property and advise you if you are able to proceed with lodging a caveat. Give us a call now on 02 8722 5021 for a free consultation or book your consultation online now.