Guide · property titles

What is a caveat on a property?

A caveat is a notice recorded on a property's title stating that someone claims an interest in the land. It does not give them ownership, but it prevents most dealings — a sale, a transfer or a new mortgage — from being registered while it remains. It is removed by withdrawal, by a lapsing notice, or by court order.

What it is, in one paragraph

Australian land is held under the Torrens system, where the register is the proof of ownership. A caveat — from the Latin for "let him beware" — is a warning recorded against a title by someone who says they hold an interest in that land which is not yet registered. Its effect is procedural rather than proprietary: it does not give the caveator the property, or any right to occupy it or sell it. It tells the land registry not to register dealings that would defeat the interest being claimed, which in practice means the title is frozen until the caveat is dealt with.

What a caveat stops, and what it does not

A caveat does	A caveat does not
Prevent a transfer being registered	Prevent you agreeing to sell — only the registration of the transfer
Prevent a new mortgage being registered	Affect a mortgage already registered, which keeps its priority
Put every searcher of the title on notice	Give the caveator possession or any right to enter the land
Protect an unregistered interest until it is resolved	Give the caveator a power of sale the way a mortgage does
Appear on any title search	Appear on your credit file — the two are unrelated systems

Who can lodge one

Only a person with a genuine legal or equitable interest in the land. That includes a lender who has been given a charge over the property under a loan agreement, a purchaser under a contract of sale, a beneficiary under an estate, a party to a family law proceeding, and in some circumstances a builder or a person with an equitable interest arising from a contribution to the property.

Being owed money is not, on its own, an interest in land. A supplier who is owed $40,000 cannot lodge a caveat over a customer's house simply because the debt exists. Lodging a caveat without a proper basis can expose the caveator to a claim for the loss it causes — a sale that falls over is an expensive thing to have caused without a right to do it.

How a caveat comes off

1
The caveator withdraws it.The ordinary route. Where the caveat secures a debt, the debt is paid at settlement and the withdrawal is lodged as part of it. Nothing goes to court and nobody argues.
2
The registered owner serves a lapsing notice.An application to the land registry that puts the caveator on a clock: go to the Supreme Court for an order extending the caveat, or it lapses. In New South Wales the period is 21 days from service under section 74J of the Real Property Act 1900. Other states have their own provisions and their own periods — check with your state's land registry or a solicitor.
3
A court orders its removal.Where the claimed interest is disputed, the Supreme Court decides whether the caveat should stand. This is the slowest and most expensive route and is a last resort.

Caveat or second mortgage: the difference that matters

Both can secure a loan against a property that already has a bank mortgage on it, and lenders use both. The choice between them is usually decided by time rather than by preference.

	Caveat	Second mortgage
Consent of the first mortgagee	Not required	Generally required
Typical time to put in place	Days	One to two weeks, waiting on consent
Status on title	A notice of an unregistered interest	A registered security interest
Priority on a sale	Behind registered interests	Registered, ranked second
Effect on the first mortgage	None — it is unaffected and still first	None — it is unaffected and still first
Relative cost to the borrower	Higher, reflecting the weaker position	Lower, reflecting the stronger position

That trade is the whole reason both exist. If the settlement date allows time for the bank's consent, a second mortgage is usually the better-priced loan. If it does not — a settlement on Friday, a notice with a deadline, a claim to be paid this week — the caveat is the instrument that can actually be in place in time. Our pages on caveat loans and second mortgages set out each in full.

If a caveat has appeared on your title

Get a title search so you can see who lodged it and on what stated ground, and take advice quickly. The removal mechanisms run on deadlines, and a caveat left in place will stop a sale or a refinance at the worst possible moment — usually about a week before settlement, when there is no time left to deal with it calmly. If it secures a debt you know about, the fastest resolution is almost always paying that debt at settlement rather than fighting the caveat.

If the number was not the whole problem

Most people reading this have either found a caveat on their own title and want it gone, or have been offered a loan that will be secured by one and want to know what they are agreeing to.

If you are reading this because money is tight, it may be that what you actually need is fast business finance — and HomeSec can lend with very few qualification criteria. All you need is sufficient equity in real estate and a business purpose: no financials, no valuation, no credit score threshold, funded in as little as 24 hours from a clean, complete scenario. Best of all, the first six months can come with no requirement to make any payment.

That's the HomeSec Advantage.

Questions people ask alongside this one

What does a caveat on a property actually do?

It is a notice recorded on the title warning that someone claims an interest in the land. It does not transfer ownership and it does not give the caveator possession. What it does is stop most dealings — a sale, a transfer, a new mortgage — from being registered while it remains, because the land registry will not register a dealing that is inconsistent with the caveat. In practice it is a handbrake rather than a claim on the property itself.

Does a caveat stop me selling my house?

It does not stop you agreeing to sell, but it will stop the transfer being registered, which means settlement cannot complete while it is there. In practice a caveat is dealt with at settlement: the debt behind it is paid from the proceeds and the caveator withdraws it. Your conveyancer will see it on the title search and raise it early.

Who can lodge a caveat?

Anyone with a genuine legal or equitable interest in the land — a lender who has been given a charge over it, a buyer under a contract, a party to a family law or estate dispute, a builder in some circumstances. An interest is required; a mere debt is not enough. Lodging one without a proper interest can expose the caveator to compensation for any loss caused.

How is a caveat removed?

Three ways. The caveator withdraws it, which is what happens at settlement of the debt behind it. The registered owner applies to the land registry to serve a lapsing notice, which puts the caveator on a short clock to go to court or lose it. Or the Supreme Court orders its removal. Which of these applies, and how long the clock runs, depends on the state — in New South Wales a caveator has 21 days from service of a lapsing notice to obtain a court order, under section 74J of the Real Property Act 1900.

Is a caveat the same as a mortgage?

No, and the difference matters. A mortgage is a registered security interest with a defined ranking and a statutory power of sale. A caveat is a notice of an unregistered interest: it ranks behind registered interests on a sale, and the caveator's remedy is to enforce the underlying agreement rather than to sell the property directly. That is why a caveat loan is priced differently from a second mortgage over the same property.

Why do lenders use a caveat instead of a mortgage?

Speed, and one thing specifically: a caveat does not need the first mortgagee's consent. A registered second mortgage generally does, and waiting for a bank to issue consent can take one to two weeks. Where a settlement is this week, that difference is the whole decision.

Can a caveat be lodged without me knowing?

It can be lodged without your prior agreement, but you will be notified — the land registry sends notice to the registered proprietor after lodgement. If a caveat has appeared on your title and you do not know why, get a title search and take advice promptly, because the mechanisms for removing one run on deadlines.

Does a caveat affect my credit file?

No. A caveat is recorded on a land title, not on a credit report. The two systems are unrelated. What can affect a credit file is the underlying debt, if the creditor reports it or takes action that is reportable.

Can I still refinance with a caveat on the title?

Not until it is dealt with. A new mortgagee will require a clear title, so the caveat has to be withdrawn — usually by paying out the debt behind it from the refinance proceeds at settlement. Tell your broker it is there at the start rather than the week before settlement.

Sixty seconds, no documents

See if you qualify in sixty seconds

Three short questions, no credit check to apply and no financial statements. A Lending Manager reads it and calls you back with a real answer — not a call centre, not an algorithm.

That's the HomeSec Advantage.

See if you qualify Call 1300 93 83 87Mon–Fri, 8:30am – 5:30pm Melbourne time

Other things business owners look up

Find your director ID Find your ABN or ACN Find your company's TFN Find your ATO payment reference If your ABN is cancelled Set up an ATO payment plan What LVR means, with examples Get a copy of your rates notice Get a mortgage payout figure Do you qualify?Do you need financials?How long it takes Secured vs unsecured No credit check, honestly Check if a company is in liquidation What a business is worth Small business restructuring Every guide

Reviewed by Jason Brockmuller, Joint Chief Executive