Challenging a caveat lodged on NSW land
Caveats can block dealings and force the caveator to either commence proceedings to establish their caveatable interest or remove the caveat. The Real Property Act provides two main removal mechanisms: a lapsing notice (s 74J) and a Supreme Court removal application (s 74MA).
This is an 8-step workflow for challenging a caveat lodged on NSW Torrens land under the Real Property Act 1900 (NSW), including lapsing notices and removal applications.
Before you start
- Title search confirming the caveat
- Caveat and stated interest reviewed
- Client instructions on the underlying relationship obtained
- Proposed dealing timeline identified
The workflow
Obtain a current title search
Obtain a current title search and the lodged caveat from NSW LRS. Identify the caveator, the stated interest, and the prohibition.
Assess the stated caveatable interest
Assess whether the stated interest is a valid caveatable interest (legal or equitable) — general commercial debts alone are not caveatable.
Attempt informal withdrawal
Write to the caveator requesting voluntary withdrawal of the caveat. Set out the reasons why the interest is not caveatable or why the caveat should be withdrawn.
Issue a lapsing notice
If informal resolution fails, lodge a lapsing notice under s 74J with LRS. The caveator must commence proceedings within 21 days to sustain the caveat.
Consider a removal application
Where urgent or where a lapsing notice is not appropriate, consider an application under s 74MA to the Supreme Court for removal of the caveat.
Prepare affidavit evidence
Prepare affidavit evidence for any Supreme Court application — title particulars, the caveat, correspondence, and evidence undermining the caveatable interest.
Run the Supreme Court application
File and serve the removal application. Attend the hearing and address the serious question to be tried and balance of convenience framework applied by the court.
Lodge the removal and update records
On removal, lodge the sealed order with LRS and update conveyancing and mortgage records. Consider any claim for damages under s 74P for lodgment without reasonable cause.
What you will have at the end
A removed or lapsed caveat that permits the registered proprietor to proceed with the intended dealing, plus any claim for compensation if the caveat was lodged without reasonable cause.
Common issues
- Treating every equitable claim as automatically caveatable
- Missing the 21-day window to commence substantive proceedings
- Filing removal applications without clear evidence
- Overlooking costs consequences of the removal application
- Not considering an undertaking as to damages
Run this workflow on a real matter
Quillio drafts correspondence, lapsing notices, and Supreme Court removal applications including the serious question analysis. See /practice-areas/property-lawyers or start a free trial.
This workflow is a general guide for NSW Torrens land. Other jurisdictions have different caveat regimes.
Try this workflow with Quillio.
Quillio can run this workflow on a real matter, with citations to current AU authority on every step. The free trial requires no credit card.
Start your free trial