Why You Should Always Lodge a Purchaser's Caveat in Victoria
/Why You Must Lodge a Purchaser's Caveat After Signing a Contract in Victoria
By David Dawn – Licensed Conveyancer, Victorian Property Settlements
Purchasing property is likely to be one of the most significant financial transactions you'll undertake. Once contracts are exchanged, many buyers mistakenly assume the hard part is over. But unless you protect your interest in the property immediately after exchange, you're leaving the door open to catastrophic financial loss—and the law may not be on your side if things go wrong.
Lodging a caveat is a critical, cost-effective way to ensure that your interest in the property is recognised and protected until registration. If you don’t lodge one, you're taking a gamble with your future title—and the consequences of being wrong can be irreversible.
This article explains, in plain terms, why a purchaser’s caveat matters, how the law views your interest after contract exchange, what modern risks exist (especially with electronic conveyancing systems like PEXA), and why—in our view as licensed conveyancers—it is irresponsible not to lodge a caveat.
What Is a Caveat and Why Does It Matter?
Under Victoria’s Transfer of Land Act 1958 (Vic) (“the Act”), a caveat is a formal notice recorded on the title register that tells the world you claim an interest in the land. It warns others that your interest exists and prevents new dealings with the title—such as the registration of a mortgage or transfer—without your knowledge.
The relevant section of the Act is:
Section 89(1) – Transfer of Land Act 1958 (Vic):
“Any person claiming any estate or interest in land under any unregistered instrument or dealing, or by devolution in law or otherwise, may lodge with the Registrar a caveat in an approved form.”
This includes the interest created by a Contract of Sale. Once a property contract is signed and exchanged, the purchaser gains an equitable interest—an interest in law which can (and should) be protected with a caveat.
“But the Contract Is Binding – Isn’t That Enough?”
No. This is the most common misconception we see.
While it’s true that the contract is legally binding, it does not create a registered interest on the title. Your name does not appear on the certificate of title until settlement and formal registration. During this time, you are vulnerable.
If You Don’t Lodge a Caveat:
The vendor can take out new loans and register new mortgages;
The vendor’s creditors can place a writ or warrant on the land;
Fraudulent third parties can attempt a sale using forged signatures;
The land can be sold twice, and you may not find out until it’s too late.
If your interest is not registered or protected with a caveat, you are invisible to the world.
Black v Garnock – The High Court Case Every Purchaser Needs to Know
In 2007, the High Court of Australia handed down its decision in Black v Garnock [2007] HCA 31—a landmark case that shook the property industry. In it, the purchasers signed a contract and paid the full purchase price, only to be caught out by a writ lodged on the title by a creditor just hours before registration.
The Court ruled (3:2) that because the buyers had not lodged a caveat to protect their interest, the creditor’s writ took priority. The buyers had to pay twice or lose the land.
The Lessons from Black v Garnock:
Registration is everything in the Torrens system;
Equitable interests are not enough on their own without caveat protection;
Relying on "modern practice" is no defence when disaster strikes;
The law will not protect purchasers who fail to protect themselves.
Justice Callinan: “Old practices are best.”
Chief Justice Gleeson (in dissent): “At the expense of the purchasers, the accountants will have obtained blood from a stone.”
You can read the judgment summary at:
High Court of Australia – Black v Garnock Judgment Summary
The Rise of Electronic Conveyancing and the PEXA Risk
The introduction of electronic conveyancing via the PEXA system has increased efficiency—but also introduced new risks.
As conveyancers, we have watched with concern as the reliance on PEXA has led to:
Cybersecurity breaches affecting trust accounts and settlements;
Unexplained delays in registration due to technical errors or lender inefficiencies;
Reduced oversight by parties unfamiliar with the process or unable to monitor title records in real time.
When registration is delayed—and the title still shows the vendor as the owner—you are exposed. Lodging a caveat ensures your interest is visible to others during this critical time.
Identity Theft and Title Fraud – A Growing Threat
Victorian property titles are now fully electronic. While convenient, this system is not immune to fraud. Title fraud and identity theft are growing concerns in conveyancing.
Scenarios we’ve encountered or seen include:
Fake vendors selling properties using forged documents;
Rogue agents lodging transfers using compromised identity documents;
Dishonest ex-partners trying to encumber property for leverage.
A purchaser’s caveat acts as a tripwire. When a caveat is lodged, the Land Registry sends a notice to the title holder. If that holder is unaware of the transaction, they are alerted—and the fraud can be stopped in time.
Examples of When You Must Caveat Immediately
The Stressed Seller
If you suspect the vendor is under financial pressure—due to unpaid rates, multiple mortgages, or a suspiciously discounted price—you must lodge a caveat.Early Release of Deposit
If you’ve agreed to release the deposit under section 27 of the Sale of Land Act 1962 (Vic), your funds are at risk. Lodge a caveat immediately to secure your beneficial interest.Delays in Mortgage Registration
Banks often delay lodging transfers after settlement. Your caveat ensures your interest is on title, even if they take weeks or months to act.Any Suspicious or Unusual Circumstances
If anything about the transaction raises your suspicions—poor communication from the vendor, inconsistent signatures, changes to the settlement date—you should lodge a caveat as a matter of best practice.
Legal Protection vs. Legal Liability – What If You Lodge a Caveat Improperly?
Some buyers are told that lodging a caveat could get them into legal trouble. This is true only if you lodge a caveat without a genuine legal interest.
Purchasers under a signed contract of sale do have a caveatable interest. Lodging a caveat in this context is entirely proper and protected under section 89 of the Transfer of Land Act 1958 (Vic).
However, caveats lodged maliciously, without a legal basis, or in breach of the contract may attract liability. That is why it is important to instruct a licensed conveyancer to handle the drafting and lodgement properly.
The Practical Process – What It Involves and What It Costs
At Victorian Property Settlements, our fixed fee for lodging a purchaser's caveat is $249.00 + GST, which includes:
Drafting the caveat, including provisions barring inconsistent dealings;
Lodgement with the Registrar;
Alerting the vendor’s solicitor and any mortgagee;
Monitoring registration;
Coordinating removal post-settlement.
This fee also covers the statutory lodgement charge and our agency search fees.
For less than the cost of a building inspection, you can prevent a legal and financial catastrophe.
Counter-Arguments: What If I Just Don’t Bother?
Some buyers say:
“It’s only a short settlement. What could go wrong?”
Our answer:
It only takes one dealing—a mortgage, a writ, or an unauthorised transaction—to defeat your interest.
Others say:
“The vendor seems trustworthy.”
Our answer:
Trust does not override registration. Even if your vendor is honest, their creditors may not be. And fraudsters are not always obvious.
And some say:
“No one else I know lodged one.”
Our answer:
That may be true—but luck is not a legal defence.
Conclusion – Why You Must Lodge a Purchaser’s Caveat
We’ve seen too many cases where purchasers have suffered needlessly due to misplaced trust or advice to “not bother” with a caveat.
Our professional advice is simple and clear:
Lodge a caveat on every purchase.
It’s best practice, it’s affordable, and it may be the only thing standing between you and the loss of your property rights.
Final Word – What Would You Do?
As the principal of Victorian Property Settlements, I can say this without hesitation: I would never purchase a property in Victoria without lodging a caveat. It’s not a matter of paranoia—it’s prudence.
When I act for purchasers, I don’t take chances. And when we advise our clients, we give the advice we would follow ourselves.
If you're currently under contract and wish to proceed with a caveat, contact our office today. We will prepare, lodge, and manage the entire process on your behalf.
Protect your interest. Protect your investment. Lodge the caveat.
David Dawn
Licensed Conveyancer
Victorian Property Settlements
PO Box 11220
Frankston VIC 3199
📧 david@quick32.com
📞 (03) 9783 0111