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ARTICLE · 04 DECEMBER 2008

Development Projects – ´No Caveat´ Clauses And Powers Of Attorney

DLA Piper Australia
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Property developers often require purchasers to agree to 'no caveat' clauses and to grant powers of attorney in favour of the developer, in order to assist the efficient running of developments.

AustraliaReal Estate and Construction
Nick Cross
Nick Cross
Justin March
Justin March

Property developers often require purchasers to agree to 'no caveat' clauses and to grant powers of attorney in favour of the developer, in order to assist the efficient running of developments. However, the use of these mechanisms was recently scrutinised by the New Zealand High Court in Nicholson v Morning Star (St Lukes Garden Apartments) Limited [2008] NZHC 599.

THE FACTS

In the Morning Star case, the developer changed the plans for a residential property development midway through the development. A purchaser of one of the apartments objected to the changes and lodged a caveat over the 'future development units' in the development land.

In what were effectively preliminary proceedings (an application to lapse the caveat), the Court had to consider:

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