When couples separate, it is not uncommon for Party A to be named on title for the family home, while Party B is unnamed, even though Party B made substantial contributions to the relationship. This may be the result of Party A having purchased the home prior to the relationship commencing. If Party A is the sole registered owner of the home, this can pose a risk to Party B post separation, noting that Party A can sell the home and deal with the net sale proceeds as they please. If this situation applies to you and you wish to circumvent this risk, one option is to register a caveat to temporarily protect your interests of the home.
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But first, what is a caveat?
A caveat is a ‘registerable instrument’ which, when lodged with the Titles Office, can halt any further dealings on the title of a property for a period of time. For instance, in family law, caveats can be used to protect the family home, or any real property, of a fractured relationship while a property settlement is being finalised. In a practical sense, this can prevent Party A from dealing with the home as they please, such as refinancing or selling the home, during the separation process. When a caveat has been registered successfully, the caveat needs to be withdrawn or removed before any more dealings affect the property.
Caveats are generally simple to draw-up and lodge, and can be quickly enacted to protect Party B’s interest over the property.
However, Party B needs to be eligible as a ‘caveator’ in order for the caveat to be successfully registered. If Party B does not have grounds to lodge a caveat, there can be serious consequences if lodged improperly. For instance, an order could be made for Party B to pay Party A’s costs in having the caveat removed or to compensate Party A for any damages should Party A have suffered financial loss due to the lodgement of the caveats.
How does Party B lodge a caveat?
In order to be eligible to lodge the caveat, the ‘lodger’ must have a ‘caveatable interest’ in the property. This means that the caveator (Party B) must demonstrate that they have an interest in the property, despite the property not being owned by them in a legal sense. In family law matters, the most common caveatable interest is Party B claiming an equitable interest in the property by virtue of their financial or non-financial contributions to the acquisition, maintenance and improvement of the home.
Examples of Party B having an equitable interest in the home include, but are not limited to, the following considerations:
- Did Party B contribute towards the purchase of the home?
- Did Party B make any financial contributions to the home, such as contributing to the payment of home insurance, rates and mortgage repayments?
- Did Party B make any non-financial contributions to the home, such as DIY renovations, maintaining the home, and/or caring for the children of the relationship?
Party B has lodged a caveat, now what?
If Party B has successfully and properly lodged a caveat over the home, there are strict timeframes which ought to be complied with. These include the following restrictions:
- Party B has three months to commence proceedings in the Federal Circuit and Family Court of Australia to demonstrate their interest claimed pursuant to the caveat. In family law, this can be done by filing an Application for property orders. Notice of Court proceedings needs to be provided to the Queensland Titles Office.
- Party A can provide notice to Party B that Party B ought to commence Court proceedings within 14 days to substantiate the caveat. Notice of Court proceedings needs to be provided to the Queensland Titles Office.
If Party B fails to commence Court proceedings pursuant to the above timeframes, the caveat will lapse and Party A can apply to the Titles Office, or Court (by way of Orders) for the caveat to be removed.
Before you lodge a caveat, it is always wise to speak to an experienced family lawyer to guide you through this process.
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