FHB - risks of this caveat?

FHB and found the first property in a long time that ticks majority of my boxes.

However, my conveyancor has flagged a caveat in the contract as something to be wary of.



He has advised that the vendor should withdraw on or before settlement, but sometimes these situations can get tricky when they don't follow through, and a lot of time and money (P&B and Conveyancor fees) can be wasted.

The name of the vendor is two people with differing surnames, lets say John Smith and Karen Jones.
And the Caveator is someone with the name Kylie Smith.

I have not come across Caveats in the few contracts I have reviewed. I am trying to gauge the risk of proceeding or if I should move onto the next one.

Any experience with this would be great. Trying to understand the worse case scenarios, and if there is anything I could negotiate to minimise risk.

 

I can't read it. What is the basis that they have to lodge the caveat.

There is little issue if it is removed, but often they won't be and this will mean you cannot settle.
Get some legal advice.

 

Thanks Terry. Bigger image here.

As I understood my conveyancor, I believe it is a claim over ownership.

Good call. Think I have exhausted the advice a conveyancor can provide.

Just trying to get my head around how unusual this is, and any similar stories on how these can pan out.

 

might be some trust relationship.
If so maybe not much to worry about, just get them to confirm they will be able to give clear title at settlement.
If it was family law related caveat these would be more likely to have disputes at the end.

 

Have emailed the REA to enquire about this. What sort of reassurance would one be able to expect?

 

a feeble one!

 

Based on the caveator having the same surname it may have been for asset protection from a new partner/wife/other.......
Or even as part of a now deceased parents will (leaving their 50% to a child after the passing of the remaining owner).

I would have thought that this should be sorted on settlement day by appointed representatives via bank cheque to various parties with release documents (just like mortgage release at settlement).

There are various steps that can be put into place to ensure a smooth transition on settlement day (providing all interested parties are transparent early on).

How much or % of the property is the caveat for ?
Maybe you could agree to early release of deposit to be used to clear the caveat prior to settlement so the title is cleared.

Haven't had to go thru this previously, just my instant thoughts

Edit: as the caveat was only taken out late June 2020 and the applicant having the same surname it sounds like a family dispute !
Tread carefully

 

you can't just put a caveat on for asset protection. A caveat is a notice that someone else has an interest in the property.

 

Did your conveyancer explain the nature and impact of the caveat, and the process for removing it?

 

Hey thanks all for replies. Will add more in morning. An update after contacting REA:


REA:
Husband and wife own the property, the husband’s mother put a caveat on the property because they are separating (its was for security).

Sellers Lawyer:
Your caveat will be removed at settlement of the properties, and as per the Court Orders made on 28 September 2020, the balance of net sale proceeds will be held by XXXX Lawyers and invested in an interest bearing account in the joint names of the husband and wife. To protect your interest, these monies are not to be released unless there is written agreement between you, SellerName & OtherSellerName or an order of the Court

 

Don't count your chickens before they hatch.

 

Hey Terry. Can you elaborate?
As I see it, my conveyancer has said that worse case scenario they fail to sort it, and I’m just down his fees and P&B and my time, which I am ok with. He mentioned he can draw up a termination contract if they can’t remove the caveat within settlement.

My concern has actually shifted to the fact there are tenants on a month by month basis, the contract is vacant possession, but currently in VIC I don’t think you can evict anyone without a tribunal due to COVID-19. REA is of course confident that they will be gone and place cleaned before settlement but that relies on them wanting to move as I see it.

 

u wouldn't book a removalist until you actually hear it has settled.

 

Doesn’t sound like the mother has a caveatable interest, unless she’s owed money.

Ask your conveyancer to explain it to you: that’s what you’re paying them for. Or if they’re out of their depth, better get a lawyer son.