What is caveat?
A caveat means to stop a property from being transfer of ownership because the person who register the caveat on the property has an interest.
How to caveat?
Go to land office, fill up a form and to provide supporting document to proof you have an interest in the property then a caveat will be registered in the title.
It is to protect the person who has an interest in the property.
For example, when you purchase a property with individual or strata title, your lawyer will proceed to register a caveat after you signed Sales & Purchase Agreement (SPA) to protect your interest. It is because you would have paid 10% deposit upon signing the SPA. If your lawyer does not register a caveat then vendor will be able to sell and/or transfer of ownership to others instead of you therefore you might lose your deposit paid.
Another example is Bank will register a private caveat as a chargor for a property which they are financing.
How to identify a title with caveat?
All interested bidder is highly recommended to conduct title search at relevant land office. If there is a caveat, it will be shown in the title search result such as in image shown below.
If the property is still under master title then usually you will not need to conduct title search because the property does not have its own title yet therefore it can’t be caveat.
How to manage this risk?
You can still purchase a property with caveat but you will need to identify what type of caveat and reason of caveat on the property. There are 2 common types of caveat:
Private Caveat which is register by Individual or Finance company
Registrar Caveat which is register by Statuary Body / Government Agencies