Caveats, Loans and Homes

You might have heard the term “caveats” thrown around here and there when referring to loan agreements and property. But what exactly are they?

The short of it is that a caveat comes from the Latin word meaning “warning”. It is essentially a notice (statutory injunction) recorded on a property that may prevent the owner from dealing with that property including selling it or transferring it. This can be a nuisance where the owner may wish to sell the property urgently in this market and a caveat prevents them from doing so.

A caveator is the one who records the caveat with the Land and Property Information (LPI). It can be a person or a company who is claiming an interest in the property. In order for the owner to deal with the property, they must either remove the caveat or seek the caveator’s consent. 

1. Recording a Caveat

There are certain circumstances that allow people or companies an entitlement to grant a caveat. One of the most common instances that give the right to caveators to record a caveat is when the property owner gives them that right by consent. 

2. Who in their right mind would do this?

Well for an example you may wish to buy a property for $725,000.00 but the bank has only approved a loan for $700,000.00. In order to obtain finance for the shortfall of $25,000.00, you may wish to approach a private lender for that loan. That loan agreement may contain a clause which allows the private lender to register a caveat until the balance of the loan is satisfied.  

In that scenario, the bank will record a mortgage on the property whilst the private lender records a caveat as the property will be the security for the respective loan agreements.

Some caveators may have an equitable right to register caveats. For example in a Sale of Land transaction where the purchaser pays a deposit for the purchase of land, that purchaser may be entitled to record a caveat on the property until the settlement of the transaction.

3. Removing a Caveat

In most circumstances, the removal caveats are not controversial. If the debtor satisfies their liabilities owed to the caveator, for example a home owner paying off a debt to a private lender, then the caveator will remove the caveat by providing a Withdrawal of Caveat form to be lodged with LPI.

Alternatively, the property owner can apply for a Lapsing Notice with the LPI where the caveat is removed by the authority after a lapsing period. The caveator can of course object to this and apply to the Supreme Court to extend the life of the caveat. When this happens it may be wise to offer the caveator as a substitute security to protect the caveator’s interest. That way when the property owner approaches the court to remove the caveat, the court will be more inclined to do so.

If the issue of removing the caveat becomes quite contentious the matter may be litigated and it may become necessary to obtain an order from the court seeking the removal of the caveat. 

Important Information

When you launch a caveat, it is important to note the process is different in the various states Australia wide. You also need to ensure you have caveatable interest on the land, therefore, we strongly advise you to seek legal advice before lodging a caveat.

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Barry Lazarus

CEO & Notary Public

barry@lazaruslegal.com.au 

We’d be lying if we told you that this bloke isn’t the big honcho of our team, but his name is a dead give-away. The founder of Lazarus Legal, Barry is an old school, tough as nails lawyer. They don’t forge litigators like this anymore.

With decades of experience in both Australia and South Africa, his wisdom is as renowned as his name. Back in the days when Schwarzenegger and Van Damme were kicking ass on VHS, Barry was kicking ass in the courtroom. And after all these years, he still has a reputation for refusing to back down.Barry is definitely the badass you’d want in a fight – in court or otherwise. But really, he’s a big softie. Just don’t let him know you know that (although he probably won’t read this anyway – navigating the Internet is not his strong point).

Aside from putting other lawyers in their place, taking long walks on the beach and spending time with his family, Barry enjoys seeing others succeed. Not only is Barry a staunch and unmoving litigator, he has sharp business and commercial acumen having started up ventures from scratch and growing them into full-blown franchises – from real estate to creating ice cream, to making pasta. With his experience on both sides of the commercial and legal equation, you want this guy to be on your side, whether you’re the next Zuckerberg realising your genius, or the next Zuckerberg taking on your opponents in court.

When Barry is not busy lawyering about, he is a part-time lawn bowler and a wannabe comedian, but never took both as a day job, because let’s face it, he’s a lot better at his day job.

If someone ever threatens you to lawyer up…relax, call Barry and he’ll handle the rest. 

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Mark Lazarus

Director

mark@lazaruslegal.com.au 

The visionary behind the business and the fresh blood of the Lazarus Legal team, Mark (or Laz as he is often known) owes much of his success to his past stories and experiences. And he’s made it his personal goal to bring that wisdom and formula to the firm.

He’s a bit of jet setter, splitting his time between Australia and the UK, maximising every hour of his professional life. He thrives on this adrenalin. It allowed him to work in private practice in Sydney, act for a host of famous celebrities in London, do a two year stint as a NSW barrister (and not the pretentious coffee type in the Melbourne laneways) and more recently did a gig as the Legal Director covering Europe, the Middle East and Africa for one of the world’s coolest fast-moving consumer good brands!  

As an Aussie and UK lawyer and former barrister, Mark not only has the gift of the gab but he’ll walk the walk to prove it too. He likes to think he’s a bit like Harvey Specter or Michael Corleone, the main difference is you can actually retain him as your lawyer and consigliere. He’ll tell you how it really is and will take on any challenge head on. Although litigation and court advocacy comes naturally to him, commercial and IP is what gets his blood pumping! 

When Mark is not out there doing his thing, you will probably catch him chilling at home with his family, on the sidelines of the soccer (football) pitch cheering on his two boys, crawling through mud obstacles, or training hard at the gym. Passion and commitment is what drives Mark to succeed, along with his burning desire to disrupt the legal profession by finding new ways to change the game.

He has sights on the future. So if you’re breaking new ground, ahead of the times, and on the verge of something big, but you need someone who’s got your back and who can give you straight up advice, this is the guy you will want on speed dial.

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