Protecting interests: when can lenders lodge caveats?

Lenders will often lodge caveats to protect their interest in the land until settlement occurs. However, lenders need to ensure that they have a caveatable interest prior to lodging a caveat. If a caveat is lodged where the lender does not have a caveatable interest, lenders open themselves to significant liability. It is also important to outline the common circumstances in which caveats can be circumvented.

What is a caveat

A caveat is a statutory injunction which prevents the Registrar General from registering certain dealings and/or plans on a title until the caveat is removed or consent to the dealing/plan is provided.

In New South Wales, caveats are governed by the Real Property Act 1900 (NSW) ("the Act") and the general law. Section 74F(5) of the Act sets out what must be included in a caveat including: the name and address of the caveator, the prescribed particulars of the legal or equitable estate claimed and the title reference, among other things.¹ Th