In Western Australia, a caveat is a legal tool that protects a person’s interest in a property by preventing any changes to the property’s title until their claim is addressed. Lodging a caveat is a powerful mechanism to safeguard one’s rights, but it can only be used under certain circumstances. Below, we explore the scenarios in which a person can lodge a caveatable interest and the criteria that must be met to ensure the caveat is valid.
1. Legal and Equitable Interests
A caveat can be lodged when the person has either a legal or equitable interest in the property:
- Legal Interest: A person with legal ownership or rights, such as a registered proprietor, can lodge a caveat to prevent others from dealing with the property.
- Equitable Interest: A person with an equitable interest, which may arise from contributions to the property (e.g., in the case of a trust or a contribution to the purchase price), can also lodge a caveat. This interest must be something more than a mere personal right; it must be tied to the property itself.
2. Purchaser’s Interest
A person who has entered into a binding contract to purchase a property acquires an equitable interest and can lodge a caveat. This ensures that the seller cannot transfer the property to someone else before the sale is finalized. Additionally, someone holding an **option to purchase** the property also has the right to caveat their interest until the option is either exercised or expires.
3. Unregistered Mortgages and Charges
Lenders who have provided funds secured against a property can lodge a caveat to protect their interest, even if the mortgage is unregistered. A caveat ensures that the borrower cannot deal with the property in a way that compromises the lender’s rights, such as selling or refinancing, without satisfying the mortgage obligations.
4. Leasehold Interests
A person who holds an unregistered lease, particularly a long-term lease, may lodge a caveat to protect their tenancy rights. This applies to both residential and commercial leases, ensuring that the lessee’s rights are safeguarded, even if the lease is not registered on the title.
5. Easements and Rights Over Land
If a person holds an **easement** (the right to use another’s land for a specific purpose) or a **profit à prendre** (the right to take resources like timber or minerals from the land), they may lodge a caveat to protect their interest if the easement or right is not registered on the title.
6. Trust Beneficiaries
A beneficiary of a trust involving real property may lodge a caveat if they have an equitable interest in the property. This often occurs in family trust arrangements, where the trustee holds legal title, but the beneficiary has an equitable right to the property.
7. Constructive or Resulting Trusts
In situations where a person has made financial or other contributions to a property but is not the legal owner, they may claim an interest under a “constructive trust” or “resulting trust”. In such cases, the person can lodge a caveat to prevent the legal owner from transferring the property until their claim is resolved.
8. Family Law and De Facto Relationships
In family law matters, a spouse or partner may lodge a caveat if there is a claim to the property due to a financial or non-financial contribution during the relationship. A caveat ensures that the property cannot be sold or transferred until the family law dispute is settled, typically through the courts under the Family Court Act 1997 (WA) or the Family Law Act 1975 (Cth).
9. Contractual Right to Acquire Property
A person who has a contractual right to acquire a property (for example, a purchaser under a sale agreement) can lodge a caveat. This caveat protects the purchaser’s right to receive the property until the contract is fully executed. In cases where a party seeks specific performance of a contract to transfer land, a caveat may be lodged to prevent dealings with the property until the court resolves the matter.
When a Caveat Cannot Be Lodged
It is important to note that not every interest is caveatable. Personal rights, such as a right to occupy property under a license, do not grant a proprietary interest and therefore cannot support a caveat. Similarly, lodging a caveat based on a future or speculative interest is improper and can lead to legal consequences, including the caveat’s removal and potential liability for damages.
Conclusion
A person can lodge a caveatable interest in Western Australia when they hold a legal or equitable interest in the property, often arising from ownership, a contract, a trust, or financial contributions. Caveats provide strong protection by preventing any unauthorized dealings with the property, but they must be used carefully and backed by a legitimate claim. Lodging a caveat without a valid interest can lead to legal challenges and penalties, so seeking legal advice is crucial before proceeding.