When a family relationship breaks down — for example, when a couple divorces — many people start thinking about selling the house. As property lawyers, we frequently come across a situation where one party wants to sell the house but cannot. This is because the property is only in one party’s name, yet during the relationship the other party also made significant contributions to the property, which prevents the sale from going through. The most typical scenario is that both parties contributed to the mortgage repayments together — this is a financial contribution, and if the couple divorces, the court will also assess each party’s contributions and the division of property on that basis. So, when the relationship breaks down, the other party can also take steps to protect their legitimate rights, including considering lodging a caveat. A caveat on the property can prevent the house from being successfully sold.

The property is not in my name, and the other party wants to sell it without my consent — how can I stop them?

If a property has always been in one party’s name, once the family relationship breaks down, the party holding title may well “take matters into their own hands” and sell the property. However, during the relationship, the other spouse may have made many contributions to that property (whether financial or non-financial), and these contributions cannot be directly reflected on the title — after all, only one name appears on the certificate of title. Even so, in this kind of situation where one party wants to sell the property without the other’s consent, the non-titled party can still lodge a caveat.

What is a caveat?

“Caveat” translates to “transfer prohibition notice,” and is sometimes simply referred to as a “sale-block notice” or “lien.” The purpose of a caveat is mainly to prevent the landowner (i.e. the current seller) from transferring title to the land or otherwise dealing with it without the third party’s knowledge. A caveat is a legal notice lodged with the relevant state or territory land titles registry; once a caveat is registered against the title, the property owner will be unable to deal with the property, including by way of sale or otherwise.

A caveat can be removed.

Who is eligible to lodge a caveat?

Eligibility to lodge a caveat (a caveatable interest) does not arise automatically simply because the parties are married or in a de facto relationship. The non-titled party’s eligibility to lodge a caveat arises from their financial or non-financial contributions to the property. Financial contributions may include, but are not limited to, contributing to mortgage repayments and paying for renovations and maintenance; non-financial contributions may include, but are not limited to, caring for the children.

Please note: if the non-titled party lodges a caveat but does not in fact have a caveatable interest, they may have to compensate the titled party for any financial loss caused as a result. The titled party may also apply to the Supreme Court to have the caveat removed, or require that court proceedings be commenced promptly.

Information required to lodge a caveat (NSW example)

• If you wish to lodge a caveat against a property, the following information must be provided:
• the name and address of the applicant (the caveator);
• the name and address of the registered proprietor;
• information relating to the caveat;
• details of the equitable interest;
• a certified statutory declaration;
• signatures of the applicant and lawyer;
• how the caveat can be removed;
• withdrawal by the applicant themselves;
• lapsing (the caveat being lapsed by the owner of the property by a lapsing notice);
• a removal order from the Supreme Court;
• cancellation by the land titles registry.

Conclusion

If the word “caveat” appears on the property documents, it means the property cannot be sold. When a family relationship breaks down, if one party wants to sell the house without the other party’s consent, the other party can protect the property by lodging a caveat. It is important to note that, before lodging a caveat, the non-titled party must be sure they have a caveatable interest — that is, the standing to lodge the caveat — otherwise they may be held liable and face substantial damages claims (from the titled party). Property transactions and caveat applications involve many issues, so before and during the caveat application process, it is best to have the assistance of a property lawyer.