What is a Caveat?
Caveatable interest family law is someone with a legitimate claim or interest in the property.
In Australian law, a caveat is a document that can be lodged.
It doesn’t create an interest in the property but protects it from being dealt with, such as selling or transferring.
It serves as a notice to any third party, like a financier, that the person lodging the caveat (the caveator) is interested in that property.
Who can lodge a caveat?
Not just anyone can lodge a caveat. The person lodging, known as the caveator, must have a “caveatable interest.”
This means that they have a legitimate claim or interest in the property.
For instance, if a purchaser signs a contract to buy real estate, they acquire a “caveatable interest” and can lodge a caveat to protect that interest.
However, simply being in a marriage or de facto relationship doesn’t automatically grant a caveatable interest.
Grounds for Lodging a Caveat in a Family Law Matter
A caveat is a legal instrument anyone can lodge with a legitimate interest in a property.
Once registered, it acts as a notice on the title, alerting potential buyers that a third party might have rights over the property.
This means that the property cannot be sold, transferred, or further encumbered until the caveat is addressed.
Lodging a caveat can be a strategic move in family law matters.
It ensures the property can’t be disposed of while settlements are negotiated or finalized.
This can be especially crucial if there are concerns about a former spouse selling the property and moving the funds offshore, making them hard to recover.
Risks of lodging a Caveat in your Family Law Matter
While lodging a caveat can be a protective measure, it’s not without risks.
You might be liable for compensation if you lodge a caveat without a legitimate caveatable interest and the property owner incurs a financial loss.
It’s crucial to consult with a lawyer to determine if you have a valid caveatable interest and if lodging a caveat suits your situation.
What are my rights in family law?
In family law, just because you have a claim to an asset pool or a house, doesn’t mean you automatically have a caveatable interest.
Removing a caveat from a property
If a caveat is lodged against your property and you believe it’s unjustified, you can take legal steps to have it removed.
Pethrick & Folmar Overview
In the Pethrick & Folmar situation, the woman in a de facto relationship lodged a caveat on a property solely owned by her partner and another co-owned by him and his sibling.
She based her claim on ‘implied, resulting, or constructive trust.’
Yet, her formal request for financial settlements vaguely asked for “a fair asset distribution” without specific details.
The man countered, wanting the caveats removed from both assets, expressing his intention to sell them to cover debts, including legal expenses. The Court remarked:
“It is trite that contributions do not, in and of themselves, give rise, without more, to an interest in property. If that were so, sections 79 and 90SM of the Family Law Act might well be otiose.” Pethrick & Folmar [2022] FedCFamC1F 905 (17 November 2022) [26].
The Court’s decision was in favor of the man. They mandated the woman to bear the costs of removing the caveats, allowing him to sell the properties.
Always Seek Legal Advice: Caveatable Interest Family Law
Navigating the complexities of caveatable interests in family law can be challenging, especially when emotions and significant assets are involved.
While caveats are protective in property disputes, they come with intricacies and potential pitfalls.
Understanding the implications of lodging or challenging a caveat in the context of family law is paramount.
Given the potential risks and the nuanced nature of property rights, seeking legal advice from a seasoned professional is not just recommended but essential.
Engaging with a lawyer ensures that your interests are safeguarded and that you’re making informed decisions every step of the way.
Director of Melbourne Family Lawyers, Hayder manages the practice and oversees the running of all of the files in the practice. Hayder has an astute eye for case strategy and running particularly complex matters in the family law system.
