Property Caveats How Do They Work

Posted on Friday, February 15 2013

Caveat Registration On Property Title.

There are a variety of different types of caveat. The most common of these is a caveat claiming a right or interest in a property and registered against the title to a property. The effect of registration of a caveat is to prevent the property owner from dealing with that land until the caveator has had its claim dealt with and resolved including selling the land in question.

Registration of a caveat serves as notice to anyone who searched that title that the person/entity that has lodged the caveat is claiming a right or interest in that land. The most common reason to lodge a caveat are as follows:

1. Purchaser interest under agreement for sale and purchase.
2. Person’s interest under an auction to purchase.
3. Mortgagee’s interest under an agreement to mortgage.
4. Lesee’s interest under an unregistered lease or an agreement to lease.
5. Beneficiaries interest under a trust who is entitled to an interest in land.

Any party that registers a caveat must have a ‘caveatable interest’. The right to lodge a caveat comes from the provisions of the Land Transfer Act 1952 which states that a caveat can only be registered against a title of a property by a person who is entitled, or has a beneficial interest in that land.

The following are NOT deemed to be a caveatable interest:

1. Loan or debt agreements that do not contain an agreement to mortgage.
2. A guarantor’s interest but does not contain an agreement to mortgage.
3. A shareholder’s interest in the land owned by the Company or a bankrupt interest in land formerly owned.

Once a caveat has been registered it can be difficult to remove. In the event that the caveator does not agree to withdrawal the caveat then a Court order is needed. A caveat may also lapse upon the Registrar of Land receiving an application to register an instrument affecting the land such as a transfer or a mortgage. The Registrar must give the caveator a prescribed notice of the lapse of caveat and the caveat will then have lapsed unless the caveator obtains a Court order to the contrary.

It should also be noted that in the event a caveat has been lodged by a person that does not have a proper caveatable interest, and without reasonable cause, the person who lodged the caveat may have to compensate for any damage or losses incurred as a result of the caveat being lodged.

In addition a Notice of Claim (which has the same effect as a caveat) pursuant to s42 of the Property (Relationships) Act 1972 can be registered preventing an owner spouse from dealing with any land deemed to be relationship property until all relationship property matters and rights as between the parties have been dealt with and resolved.


Anne Needham
Rennie Cox/Urban Legal
Barristers and Solicitors


Property Caveats By Auckland Law Firm


Publisher Comment: Join us on Google+


Comments are closed.

Expert's Bio

Anne Needham

I have over 30 years experience in providing excellent residential property legal services to clients. I have an established local (NZ based) practice and also an extensive off shore client base having acted for clients dealing with New Zealand property who are located all over the world - the internet and cellphones have made this so very easy! In addition Rennie Cox/Urban Legal has been providing legal services since 1923 and is now a progressive modern law firm providing a wide range of legal services to clients.

  • Company Name:
  • Phone:
  • Website:
  • View all articles by: