Does the buyer have to pay for a caveat to be removed?

Discussion in 'The Buying & Selling Process' started by Karl1985, 8th Feb, 2022.

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  1. Karl1985

    Karl1985 Active Member

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    assuming a buyer is paying cash and there is no mortgage involved in purchasing a land
    if there was a caveat on a land title, who pays the caveator if they took it to court due to debt owed by the current owner
    will the caveat be added to the adjustment statement and the amount deducted from the land price, or will the buyer has to pay from their own pocket?
     
  2. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    Who is litigating?
     
  3. Karl1985

    Karl1985 Active Member

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    The caveator
     
  4. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    If you are taking them to court you pay
     
  5. Trainee

    Trainee Well-Known Member

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    Wouldnt the buyer be unable or unwilling to settle unless the caveat is removed, in which case its on the seller to get it removed so that settlement can happen?
     
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  6. Scott No Mates

    Scott No Mates Well-Known Member

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    It can still settle however the caveat would need to be lifted & reapplied or possibly the caveator may grant consent to the purchaser/vendor to the transfer however the risk associated with the caveat passes with the title to the land (& onto the new owner).

    The best course of action is to have the vendor resolve the issue & have the caveat removed.
     
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  7. Karl1985

    Karl1985 Active Member

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    yes, that's what i am trying to understand, i wanted to know if there is any money owing on the land, for example land tax to the office of revenue, if the caveator refused to willingly remove the caveat, then they have to take it to court, in that case, would the money be taken from the sale price, or will the buyer have to deal with it and pay (the land tax for example) on top of the sale price?
     
  8. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    If they take it to court the dispute would be between the caveator and the caveatee. If you settle on the land you would be the caveator - you are giving a caveat on your land.
    This is why you would not want to settle unless the caveat was removed and no one else had an interest in the land. Simply removing it may not be enough if you know it is encumbered by an unregistered mortgage

    You should seek legal advice from a property lawyer.

    Land tax itself is a statutory charge on the land. you inherit any land tax owing.
     
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  9. Karl1985

    Karl1985 Active Member

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    if i settle i would become the caveator?!! i am confused, who would be the caveatee then? myself?!:) if i am the caveator i can just withdraw the caveat then
     
  10. Scott No Mates

    Scott No Mates Well-Known Member

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    Do you know why the caveat was lodged?
     
  11. Trainee

    Trainee Well-Known Member

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    The question is would you settle , as the buyer, if there is a caveat on it?
     
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  12. skater

    skater Well-Known Member

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    Wow! I did not know that. I thought that you couldn't sell a property that had a caveat on it.
     
  13. Scott No Mates

    Scott No Mates Well-Known Member

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    All of the commercial leases that I have dealt with in the NT have been secured via caveats (some odd process in those forward thinking territories). So I had to get caveator consents for a new lease.
     
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  14. Karl1985

    Karl1985 Active Member

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    Debt to a private lender
     
  15. Karl1985

    Karl1985 Active Member

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    Well if i am paying in cash, i wont be in a rush, to my knowledge you apply for a caveat removal, within 21 days it is up to the caveator to reinstanriate the caveat and take it to court or let it go, if they take it to court and they land is owed money by them, then yhe. The caveat would be removed if they get their money, but what i am not sure of is whether the verdict requires the buyerbto pay for it on top of the sale price or if it is taken from the sale price
     
  16. Scott No Mates

    Scott No Mates Well-Known Member

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    Your solicitor not a conveyancer should be advising on this and the vendor responding with the makeup of payments for settlement including the payment to the caveator in return for the agreement to lift the caveat. Payment for the removal of the caveat is at the vendor's/caveator's cost.
     
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  17. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    A caveat is just a notice that someone other than the legal owner has an interest in the property. That interest will pass with the property when title is transferred. So the new owner would be involved in any litigation after settlement.
     
  18. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    Typically a solicitor would be seeking the caveat removed and settlement adjustment passed to the vendor to discharge a claim. Or they may find the party has no caveatable interest and its a nuisance and seek it removed. Certainly a issue for a solicitor and not a conveyancer and one of the examples of why a conveyancer can cost more when they cant complete the whole job. Act early as it may take time.