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What Is a Property Caveat?

A property caveat is a legal restriction upon the use or sale of real estate. Strictly speaking, it is a written notification or warning that someone has a legal interest in a property, that may have priority over the legal rights of anyone seeking to become new owners of a property or establish some other interest in it.

The meaning of a caveat

Property caveats are primarily used in Australia and some other Commonwealth nations, and they are similar to property liens in the United States. Caveat is Latin for "beware," and a property caveat advises the owner and any potential buyer to be aware that there may be legal limitations to the sale or disposition of the property. The owner of the caveat must be notified before the property is sold or otherwise disposed of, and the property may not be sold without his permission.

When to file a caveat

Someone may be able to place a caveat on a property when she signs a contract to purchase the property. If filed in time, this would announce to other potential buyers that a contract has already been filed, so that two different buyers going through different realtors do not both sign contracts for the same property. In most places where caveats are used, the purchaser of the property does not become the legal owner until the purchase is filed with the land title office. By filing a caveat, he is providing notice that he has a claim on the property and registration of the title will be forthcoming.


A creditor may also be allowed to place a caveat on a property, as security or collateral when providing the property owner with a loan or mortgage. When a caveat is placed on a property title, the owner of the property is informed, and she may then take legal action to have the caveat removed if it was placed unfairly.

Removal of a caveat

The caveat can be removed from the property title with the signed consent of the caveator, the person holding the caveat. The caveator may also consent to certain specific dealings regarding the property, without relinquishing the overall rights as holder of the caveat. Additionally, the property owner may apply to have the caveat "lapsed," if the conditions under which the caveat was originally placed are no longer applicable. If the property owner does apply to have the caveat lapsed, the caveator must be informed in writing of the application, and has up to 21 days to take legal action to stop the lapsing.