Caveat by Commonwealth of Australia

Hi guys,

Thanks for the wealth of knowledge on this forum.

I am looking to purchase a property and have just been provided a copy of the title certificate by the sellers agent. I have noticed that there is a 'Caveat By Commonwealth of Australia' lodged in 2020 on the property.

Property was registered in the 1980s with no further change in ownership since then. I had thought that all properties with a caveat were unable to be sold without the caveat being removed first? Am I mistaken here?

I am in the process of asking my solicitor regarding this, but was wondering in the meantime if this is something to be concerned about. What kinds of situations would this caveat be added by the government? Would this prevent bank financing?

Additionally, is there any government branch I am able to contact for further information on the specifics of any caveat/encumbrance on a property I wish to purchase?

Appreciate your help with this!

 

Definitely seek advice from your legal representative - Possible that it is a Caveat registered pursuant to an Equity Release loan under the Home Equity Access Scheme - see link

Home Equity Access Scheme - Services Australia

Nothing to be concerned with generally - the loan will be paid out at settlement and a withdrawal of caveat provided.

 

Hi Dan, didn't know about this one thanks.

In this case as it's a loan from the government, am I correct to assume that no mortgage will be noted on the title certificate? There is no mention of any mortgage after the 1990s.

 

That's correct - The Commonwealth registers a Caveat over the title as opposed to registering a mortgage. The Caveat is withdrawn on settlement in satisfaction of the loan funds outstanding.

 

Commonwealth of Australia ?? Could also be ATO via the solicitor general. Usually they then lift it once the correct notices issued to a buyer to withhold and pay $XXXX to the ATO. It has a liability effect on a buyer to remit net proceeds to ATO and not the vendor. Once the correct notice is issued the caveat is lifted. Its a shackle on the buyer to comply or they are personally liable.

 

Thanks guys, have confirmed with the agent that it's to do with the owner's pension and will be withdrawn prior to settlement. Apparently it's pretty common.