I am concerned my partner will sell the property in their sole name – what can I do?
A property with a caveat lodged on the title cannot be transferred or re-mortgaged until the caveat is removed. While lodging a caveat can be a quick and relatively cheap way to prevent a property from being dealt with.
However, a caveat can only be lodged if you have a caveatable interest in the property.
When can I lodge a caveat in a family law matter?
In family law matters, caveats are usually lodged to prevent the sale or transfer of a property until a distribution of assets is agreed upon.
However, the existence of a marriage or de facto relationship, or the fact that you have commenced family law proceedings, does not automatically give rise to a caveatable interest.
The usual claims for lodging a caveatable interest between former partners is the existence of an implied trust.
Some of the factors that would evidence the existence of an implied trust are as follows:
- The combining of financial resources;
- Contribution made to mortgage payments;
- Non-financial contributions to the property, such as child care, domestic duties and renovations;
- If the spouse financially contributed to the deposit of all or part of the purchase price but was not on title.
How can I remove a caveat that has been incorrectly lodged?
A caveat will usually be removed with the consent of the caveator as part of a final settlement. This article provides the alternative methods of removing a caveat if consent is not provided and the caveat has been lodged incorrectly or will seriously disadvantage the owner.
A Section 89A Application is an application made to the Registrar of Titles at the Land Registry Services for a ‘lapsing notice’ to be sent to the caveator. Once the caveator has received the notice, they have 30 days to issue court proceedings to verify they have a legal right to lodge the caveat. If they do not issue proceedings, in a week after the 30 day period, the Caveat will be automatically removed.
A Section 90(3) Application (derived from Section 90(3) of the Transfer of Land Act 1958) may be a more time effective method in urgent circumstances (for example, the property has been sold to an independent third party and settlement is pending).
Applications for a Section 90(3) Application is made to the Supreme Court. The Court will invite the parties to a hearing where the caveator must prove that they have a proper legal interest for the caveat to remain. If the Caveator cannot prove that they have a valid legal right to retain the caveat, the caveat will be removed.
If the caveator can prove to the Court that they have the right to lodge a caveat, however the retention of the proceeds of sale, rather than the property in specie is an equally helpful option, then the Court may make orders for the settlement to proceed, with the entire proceeds (or part thereof) to be held in trust pending a decision by the Court as to an appropriate distribution.
In the event that a person lodges a caveat without a valid legal reason for doing so, in the event a Section 90(3) Application is filed, they may have to pay the property owner’s costs.
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