Reasons To Put A Caveat On Property

Buying or holding property in Melbourne is a serious financial undertaking. Whether you are a first home buyer, an investor, or a business owner who has advanced money secured against real estate, protecting your interest in land is vital. One of the most effective protective tools available under Victorian law is the caveat. In everyday language a caveat is a formal warning placed on the public title at Land Use Victoria that lets everyone know someone else has a legal stake in that property.

This guide unpacks the key reasons to lodge a caveat, what it costs, how long it lasts, and answers the practical questions our Melbourne clients ask most frequently.

What Is a Caveat?

A caveat is a statutory injunction created by section 89 of the Transfer of Land Act 1958 (Vic). Any person who "claims any estate or interest in land" may lodge a caveat that prevents the Registrar of Titles from registering new dealings until the caveator is notified and has had the chance to object.

Importantly, a caveat does not give you a fresh interest in the land; it merely preserves an existing one and buys time to enforce your rights in court if necessary.

Why Put a Caveat on Property?

Below are the most common scenarios in which Melburnians lodge caveats:

These examples are not exhaustive; what matters is that you can point to a genuine proprietary interest recognised by law.

Who Can Lodge a Caveat in Victoria?

Section 89 makes it plain that any person (or their lawyer) who claims an estate or interest—whether arising from contract, trust, statute, court order, or equitable principles may caveat. There is no need to be a registered proprietor. However, lodging "without reasonable cause" exposes you to compensation claims for any loss suffered by the registered owner or a would-be purchaser.

Can I Caveat My Own Property?

Yes. The registered proprietor can caveat their own title, typically to stop fraud or unauthorised dealings where the paper title has been lost or an identity-theft risk exists. Because the registrar will already notify the owner of most dealings, this is rare but sometimes sensible particularly if you are overseas for an extended period or involved in complex family disputes.

Costs: How Much Does It Cost to Lodge or Remove a Caveat?

Government Lodgement Fee

Land Use Victoria charges a fee expressed in "fee units" that is adjusted each 1 July. As at the 2024-25 schedule one fee unit equals $19.36 and the caveat lodgement attracts 4.4 units, putting the statutory charge at about $70 for an electronic caveat. In paper form the fee is slightly higher.

Electronic Platform Fee

When lodging through PEXA or SYMPLI an additional service fee applies. For a single-title caveat PEXA's tariff from 1 July 2024 is $19.36 including GST.

Professional Fees

If you instruct a solicitor or licensed conveyancer expect to pay between $300 and $800 depending on complexity. Fixed-fee packages are common.

Removal Fees

Withdrawing your own caveat costs the same statutory fee plus a PEXA withdrawal fee (currently $19.36). If the other party forces removal, Supreme Court proceedings can run into thousands.

Proper Use of a Caveat and the Risks of Misuse

A caveat is a powerful instrument because it effectively freezes dealings on the title. But power brings responsibility. Lodging without a valid basis may expose you to:

• damages for loss flowing from a delayed sale;
• court orders to pay a property owner's legal costs;
• disciplinary complaints if you are a practitioner.

Always obtain advice before lodging; never use the caveat system as a "bargaining chip" in commercial or family disputes.

How Long Does a Caveat Last in Victoria?

A caveat remains in force indefinitely until one of three things happens:

1. Voluntary withdrawal by the caveator.
2. Lapsing notice the registered owner serves a section 89A notice giving the caveator at least 30 days to seek a court order or the caveat lapses automatically.
3. Court order removes or sustains the caveat.

Because of the lapsing mechanism most contested caveats are resolved within about 55 days from service of notice.

Can a Property Be Sold If It Has a Caveat?

Ordinarily no. A caveat prevents the Registrar from registering a transfer until the caveat is lifted, so most purchasers, banks, and their lawyers refuse to settle while it remains. The only exceptions are where the caveator consents or a court orders the caveat removed.

Frequently Asked Questions

Why would someone lodge a caveat?

To secure money advanced, protect an option, ensure an interest under a family law agreement, or freeze title pending litigation. It is essentially an early warning system that says "do not deal with this land until I am heard."

How much is it to put a caveat on property?

Budget around $90–$120 in statutory and electronic fees, plus professional costs.

What is the proper use of a caveat?

Only lodge if you have a recognisable legal or equitable interest. Lodging to pressure someone without such an interest may be an abuse attracting damages.

Who can put a caveat on a property in Victoria?

Any individual or company claiming an estate or interest, including the registered proprietor, a lender, a purchaser under contract, or a beneficiary under a trust.

Can a property be sold if it has a caveat?

Not in practice. Title cannot be registered and most financiers will not advance funds while a caveat is live.

Can I put a caveat on my own property?

Yes, but weigh the benefit against cost; the Registrar will already notify you of most dealings. It is most useful where fraud or identity theft is feared.

How long does a caveat last in Victoria?

Indefinitely until withdrawn, removed by court order, or lapsed after a 30 day notice.

How long does a caveat on a house last for?

See above there is no fixed expiry date unless a lapsing notice is issued.

Step by Step Guide to Lodging a Caveat in Victoria

1. Confirm you hold a caveatable interest

The starting point is evidence. That might be a signed contract of sale, a written loan agreement, or statutory declaration setting out a constructive trust. If your interest is merely personal for example, an unsecured loan it will not qualify. Seeking advice at this stage reduces the risk of a wrongful caveat.

2. Obtain a current copy of the title

Order a Register Search Statement and plan through LANDATA or your conveyancer. This confirms the exact legal description (volume, folio) that must be quoted and tells you whether another caveat is already in place.

3. Draft the caveat form

Land Use Victoria publishes an approved electronic form known as a "dealing." The description of your estate or interest must be precise for example: "An equitable charge arising under loan agreement dated 12 February 2025 between Caveator and Registered Proprietor." The wrong wording could invalidate the caveat.

4. Choose your lodging method

Since 2020 almost all dealings must be lodged electronically via PEXA or SYMPLI. You will need an ELNO subscriber usually a conveyancer or solicitor to create and sign the transaction. Handwritten paper caveats are now accepted only in very limited circumstances involving self represented parties.

5. Verify identity and sign

The ELNO rules require Verification of Identity (VOI) for the caveator and their signatory. Your practitioner will also obtain a Client Authorisation form.

6. Pay fees and lodge

Upon signature the ELNO automatically calculates the government and platform fees and debits your nominated account on the day of lodgement. Confirmation usually issues within minutes.

7. Monitor for requisitions

If the Registrar queries wording or supporting evidence you may receive a requisition giving 30 days to comply. Non-compliance leads to rejection and forfeiture of fees.

How to Remove a Caveat

If you are the caveator and the underlying matter has resolved, the fastest route is a voluntary Withdrawal of Caveat via PEXA. This mirrors the original lodgement process and typically registers the same day.

If you are the registered proprietor and believe the caveat is unjustified, your options are:

• Section 89A Lapsing Notice – triggers the 30 day clock described earlier.
• Supreme Court application – for urgent sales or auction campaigns the court can order removal within days, but costs are higher.

How Does a Caveat Interact With Conveyancing in Melbourne?

• Pre-contract stage – Vendors often supply a clean title. If a buyer discovers an existing caveat during due diligence, they should insist on its removal before settlement.
• During settlement – Practitioners rely on the warning function of the caveat to pause any unexpected dealings; this is especially relevant when simultaneous settlements occur in chains.
• Post-settlement – Sometimes lenders or investors leave their caveat on title to maintain ongoing security. Conveyancers must diarise a review to prevent accidental lapsing notices being missed years later.

Common Myths Debunked

"A caveat guarantees I will be paid."

False. It prevents registration but does not by itself convert your claim into cash. You may still need to sue.

"Anyone can lodge a caveat if someone owes them money."

False. You must connect the debt to an interest in the land. An ordinary trade creditor usually cannot caveat.

"Once lodged, a caveat lasts only thirty days."

False. It lasts indefinitely unless and until a lapsing notice issues or the caveator withdraws. The 30 day period relates to the lapsing mechanism, not a global expiry.

"I can sell despite a caveat if my buyer agrees."

Almost never. Even if a buyer is willing, the Registrar will not register a transfer while the caveat stands. Banks certainly will not advance funds.

The Role of Professional Advice

Victorian conveyancing is now almost entirely digital, and both the technical rules of the ELNOs and the substantive law of caveatable interests can trip up the unwary. A qualified property lawyer or licensed conveyancer will:

• assess whether your interest is genuinely caveatable;
• draft accurate claim language;
• manage timelines for lapsing notices;
• coordinate with lenders and other stakeholders to avoid settlement derailments.

The modest professional fee is small insurance against the potentially catastrophic consequences of a wrongful caveat or missed deadline.

Conclusion 

A caveat is your first line of defence when a property interest in Victoria needs urgent safeguarding. Understanding its scope, cost, and duration helps you decide when to use it and when to seek professional help. If you are contemplating lodging, withdrawing, or challenging a caveat on property in Melbourne, Pearson Chambers Conveyancing is here to guide you.

For tailored advice and a free review of your Section 32 contract, contact Pearson Chambers Conveyancing today:

Phone: 03 9969 2405
Email: contact@pearsonchambers.com.au