Caveats are like ‘flags’ placed against the title of real property (a home for example) which basically ‘reserve’ the real property and prevent its disposition (its sale) until these flags have been removed.

It is very important that caveats are drafted very carefully and only used when there is enough evidence to ensure that the person placing the caveat, has proper proprietary rights to the property, otherwise hefty costs consequences can potentially follow.

For example, you cannot place caveats on the property of a person who simply owes you money. You need to ensure that, for example, any loan is registered as a mortgage as against the property before bolstering your security with additional protection of a caveat.

Even where there is agreement in relation to the placement of a caveat as against a property, the person who has the legal right (the person whose name is on the title) can at times plead unfair or unconscionable conduct on your behalf (as the person who registered the caveat) and the caveat can be set aside by the Supreme Court, with you having to pay significant costs.

Again, it is extremely important to ensure that the legal or equitable right is there before you place the caveat. An equitable right for example can be a promise made to you that you own half or a quarter of the property and you will need to be able to prove that that promise, was actually made.

When you register a caveat, the other side has the option of issuing a ‘lapsing notice’ which means that the caveat will lapse or expire after the time indicated on the notice, usually 21 days. It is then up to you to bring proceedings in the Supreme Court to ensure that the caveat stays on, that is, if the caveat has been legitimately placed and if you have the right to preserve the caveat.

This action is usually akin to an injunction and the Court may require you to provide an ‘undertaking’ (through your counsel – your barrister or solicitor) to ensure that the other party does not stand to sustain damages unreasonably if the sale does not proceed. The undertaking means that you will need to ensure that you have a right to that property, because when the sale is prevented, the seller can potentially sustain damages, e.g. through reduced value, increased interest rates etc.

Preparing to set aside a lapsing notice and preserving the caveat requires careful and methodical work, properly conducted to ensure that the caveat (actually, the property) is, for example, preserved, ‘till the further order of the Court’.

As is the case in injunctive relief, you need to have a ‘prima facie’ case (i.e. on its face, your case shows that you have a legitimate claim) and the ‘balance of convenience’ requires that the Court should intervene to ensure that the least amount of harm visits a party.

Many of these type of matters are resolved by negotiation and agreement.

Our lawyers carefully analyse all of these very important and specific matters before providing you with the advice suitable in all the circumstances, and certainly before advising you to register a caveat on any property.

At Papallo Kouchoo we move quickly to ensure that your rights as to property remain intact and that no harm comes to you, in the shortest amount of time possible.

If you have any questions, please do not hesitate to contact us for an obligation free professional consultation.

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