Understanding Caveats in Victoria

A caveat is a formal warning placed on the title to land. It signals that someone other than the registered owner claims an interest in the property — and it prevents that property from being sold, transferred, or otherwise dealt with until the caveat is removed or withdrawn.

As explained by David Dawn, Licensed Conveyancer at Victorian Property Settlements, caveats are powerful tools — but they can’t just be lodged for any reason. They must reflect a legitimate interest in the land, and misusing a caveat can result in serious consequences.

What is a Caveat?

A caveat is a legal notice lodged with Land Use Victoria that prevents registration of certain dealings with a title unless the person who lodged the caveat (the caveator) gives consent or the caveat is removed by court order.

It is governed by the Transfer of Land Act 1958 (Vic), particularly Part IV.

Caveats are most commonly used to protect:

  • Purchaser’s rights after signing a contract

  • Unregistered interests (like an equitable mortgage or long-term lease)

  • Contractual rights (e.g. in joint ventures or family arrangements)

  • Loans or debts where the borrower agreed to allow a caveat to secure repayment

  • Beneficial ownership when someone claims to hold an interest in trust

The effect of a caveat is that the Registrar will not register any dealing (like a transfer, mortgage, or second caveat) that affects the claimed interest, unless the caveator consents or a court order permits it.

Where do you find Caveats?

Caveats may appear on:

  • A title search

  • A section 32 Vendor Statement

  • During pre-settlement checks by the incoming mortgagee

They are relatively common in:

  • Off-the-plan purchases

  • Family law disputes

  • Delayed settlements where parties want to protect their interest

  • Development sites with multiple investors or unsecured financiers

  • Properties subject to litigation, estate disputes or financial arrangements

Idiosyncrasies of Caveats

  • Not every interest justifies a caveat — you must have a caveatable interest in the land itself, not just a financial interest in a person

  • Wrongfully lodged caveats can result in costs orders and compensation under section 118 of the Act

  • Lapsing notices can be issued by the landowner, forcing the caveator to either withdraw or apply to court within 30 days

  • Caveats don’t expire on their own — they remain until withdrawn, removed or made to lapse by legal process

  • Lodging a caveat does not create ownership — it protects a claimed interest that already exists

How do Caveats differ from other title entries?

  • Unlike Easements, caveats don’t create or allow physical access — they just freeze dealings

  • Unlike Covenants, caveats are personal protections, not permanent restrictions on land use

  • Unlike Mortgages, caveats don’t provide security for repayment unless based on an underlying interest

  • Caveats don’t guarantee the interest is valid — they merely block transactions until it’s resolved

Benefits of Caveats

✅ Protects your interest in land even if it’s not yet formally registered

✅ Delays dealings until your interest is acknowledged or resolved

✅ Common and low-cost option for securing off-the-plan purchases or unregistered agreements

✅ Can stop fraud, unauthorised transfers, or breach of contract at a critical time

Drawbacks and risks

🚩 Lodging a caveat without lawful grounds may lead to legal action and compensation

🚩 Can delay settlement, finance or transfer of ownership unnecessarily

🚩 May require costly legal proceedings to remove if not voluntarily withdrawn

🚩 Can trigger litigation between family members, business partners or parties to a contract

🚩 Poorly drafted caveats can fail to protect the interest they were meant to secure

Key Takeaway

Caveats are not ownership — they are a legal speed bump. Before you lodge or remove one, you should be clear about what interest is being claimed, what rights it creates, and what consequences may follow. It’s not something to do lightly or without advice.

📞 Need help with a caveat?

Whether you’re protecting your purchase, responding to a caveat on your title, or dealing with a dispute, we can help you understand where you stand — and take steps to resolve it. We prepare and lodge caveats regularly and can explain what they do and don’t cover.