Can I Lodge a Caveat Over Property After Separation?

What Is a Caveat?

A caveat is a notice recorded on the title of land that warns anyone dealing with the property that another person claims an interest in it.

In practical terms, a caveat can prevent or delay the registration of certain dealings with the property unless the caveator's claim is first addressed.

A caveat does not determine ownership of the property, nor does it automatically give a person a share of the property. Rather, it serves as a mechanism for protecting an alleged interest until the dispute can be resolved.

Can a Former Spouse or Partner Lodge a Caveat?

Not automatically. Being a spouse or de facto partner, having made financial or non-financial contributions to a relationship, anticipating a property settlement, or having a claim or expectation under the Family Law Act 1975 (Cth) does not, of itself, create a proprietary interest capable of supporting a caveat.

A caveat lodged under section 89 of the Transfer of Land Act 1958 (Vic) must be founded on an actual legal or equitable estate or interest in the land. Depending on the facts, this may be supportable where there is a resulting or constructive trust, an equitable charge, or an enforceable agreement affecting the property. These are not automatic outcomes — each requires evidence establishing the claimed interest.

Importantly, a caveat neither creates nor determines the underlying interest. Its practical effect depends on the estate or interest claimed, the prohibition specified in the caveat, and the type of dealing it is intended to prevent.

A caveat should never be lodged merely as a tactical measure or bargaining tool. A person lodging a caveat must genuinely hold a caveatable interest recognised by law.

When Might a Caveat Be Appropriate?

Each case depends on its particular circumstances. The following are common risk contexts in which a caveat may come under consideration — but none of them, alone or together, satisfies the requirement for a caveatable interest. That requirement is a separate legal question that must be assessed on the facts:

• Real estate is registered in the sole name of one party.
• There is a concern the property may be sold or transferred.
• Contributions have been made by the non-registered party.
• Property settlement negotiations have commenced or are anticipated.
• Family law proceedings are underway or contemplated.

Obtaining legal advice before lodging a caveat is essential. Under section 118 of the Transfer of Land Act 1958 (Vic), a person who lodges a caveat without reasonable cause may be liable to compensate anyone who suffers loss as a result, in addition to the risk that the caveat is removed and cost orders are made against the caveator.

What Happens After a Caveat Is Lodged?

Once registered, a caveat may restrict certain dealings with the property until:

• The caveat is withdrawn.
• The parties reach agreement.
• The Registrar of Titles issues a notice under section 89A of the Transfer of Land Act 1958 (Vic) requiring the caveator to take action, specifying a lapse day at least 30 days after the notice is served or posted. The caveat will lapse unless the caveator has proceedings on foot to establish the interest claimed and gives the Registrar written notice of those proceedings before the lapse day.
• The Supreme Court of Victoria orders its removal under section 90 of the Transfer of Land Act 1958 (Vic) on the application of a person with a registered or other interest in the land.
• The underlying claim is otherwise resolved.

The existence of a caveat often encourages parties to address property settlement issues before transactions can proceed. However, a caveat lodged without reasonable cause carries the compensation risk described above under section 118.

Are Caveats the Only Option?

No.

Depending on the circumstances, other forms of protection may be available, including:

• Negotiated undertakings.
• Injunctions under the Family Law Act 1975 (Cth) — for example, an injunction under section 114 for married couples, or section 90SS for de facto couples — restraining a party from dealing with property. These injunctions are not granted automatically; an applicant must satisfy the Federal Circuit and Family Court of Australia that an injunction is appropriate in the circumstances.
• Orders of the Federal Circuit and Family Court of Australia.
• Consent orders dealing with property interests.

The most appropriate strategy will depend on the nature of the assets and the level of risk involved.

Obtaining Advice Early

Property settlements frequently involve family homes, investment properties, trusts, businesses and superannuation interests. For a full walk-through of how the property pool is identified, valued and divided, see our guide to the four-step property settlement process in Australian family law.

If you are concerned that a former spouse or partner may dispose of property before a settlement is reached, obtaining legal advice promptly is important. Early intervention may help preserve assets and protect your position while negotiations or proceedings are ongoing.

If you require advice regarding separation, de facto relationships, property settlements or caveats over land, contact Parke Lawyers for assistance.