Separation does not automatically give you the right to lodge a caveat over your ex’s property. We explain when a caveatable interest may exist and when a Family Court injunction may be the better option.
If you are separating and your former partner owns property in their sole name, you may be concerned that they will sell, refinance or otherwise deal with it before your property settlement is resolved.
A common question is:
“Can I put a caveat on my ex’s property?”
Sometimes, but not simply because you were married or in a de facto relationship.
In New South Wales, a caveat can only be lodged if you claim a legal or equitable estate or interest in the particular land.
A family law property claim and a caveatable interest are not necessarily the same thing.
That distinction is important.
A caveat is recorded on the title to property and can prevent certain dealings from being registered while the caveat remains in force.
Under section 74F of the Real Property Act 1900 (NSW), a person who claims a legal or equitable estate or interest in land may lodge a caveat.
Depending on its terms, a caveat may affect transactions such as a sale or transfer of the property.
But the caveat must protect an existing legal or equitable interest. It cannot simply be used to freeze an asset because a relationship has broken down.
Not automatically for caveat purposes.
Under the Family Law Act, the Federal Circuit and Family Court can make orders adjusting property interests following the breakdown of a marriage or eligible de facto relationship.
The Court looks at the parties’ property, liabilities, contributions and future circumstances when determining whether an alteration of property interests is just and equitable.
That does not necessarily mean that one spouse presently holds an equitable interest in every property registered to the other spouse.
A right to seek a future family law property settlement is different from establishing a presently existing interest in a particular parcel of land.
A caveatable interest may arise independently of your general family law claim.
Examples may include circumstances where:
Whether those circumstances actually create a caveatable interest depends on the evidence and the applicable law.
Contributing to household expenses, mortgage repayments or renovations does not automatically mean a caveat can be lodged.
The legal basis of the claimed interest must first be identified.
This is a common situation.
For example, one partner may have owned the property before the relationship, but both parties later contributed to mortgage repayments, renovations or improvements.
Those contributions may be highly relevant in a family law property settlement.
Whether they also establish a present equitable interest capable of supporting a caveat is a separate question.
The answer may depend on matters such as:
Legal advice should be obtained before treating contributions alone as sufficient grounds for a caveat.
There may be other remedies available through the Family Court.
The Federal Circuit and Family Court can make interlocutory orders in financial or property proceedings and its Financial Proceedings Practice Direction expressly includes injunctions under section 114 of the Family Law Act within financial or property proceedings.
Depending on the circumstances, a party may seek an order restraining the other person from:
An injunction and a caveat are different remedies.
A caveat depends upon establishing a caveatable interest in the land.
An injunction is a court order restraining particular conduct.
Not necessarily.
They serve different purposes.
A caveat is registered against the title and protects a claimed interest in the land.
An injunction is made by a court and can restrain conduct even where the applicant does not personally hold a caveatable interest in the property.
In a family law dispute, it may therefore be necessary to consider:
The correct strategy depends on the facts.
Not unless you have a proper caveatable interest.
A caveat should not be used simply as leverage in family law negotiations.
Section 74P of the Real Property Act provides that a person who lodges a caveat without reasonable cause may be liable to compensate someone who suffers financial loss as a result.
That risk can be significant if the caveat interferes with:
If proceedings have already commenced, you should tell your family lawyer about any concern that the property may be sold, transferred or further encumbered.
The Court can make interlocutory orders while proceedings are underway.
Recent Family Court decisions also show that asset preservation injunctions may be made where there is a real risk of prejudice if property is dealt with before a dispute is determined.
Whether that remedy is appropriate depends on the particular case.
Yes.
If you lodge a caveat, the registered proprietor can take steps to challenge it.
Under section 74J of the Real Property Act, a registered proprietor can apply for a lapsing notice.
Once the notice is served, the caveator generally has 21 days to obtain an order from the Supreme Court extending the operation of the caveat and lodge the order with the Registrar-General.
If that happens, the caveat issue can quickly become Supreme Court litigation.
A caveat should therefore not be lodged unless you are prepared to defend the interest claimed if it is challenged.
Not necessarily.
The Real Property Act restricts a caveator from repeatedly lodging caveats based on the same facts after an earlier caveat has lapsed or been withdrawn in relevant circumstances.
A further caveat may require leave of the Supreme Court or the registered proprietor’s consent.
This is another reason to get the legal basis right before the first caveat is lodged.
Before lodging anything, identify:
The central question is not:
“Do I have a family law claim?”
It is:
“Do I presently have a legal or equitable interest in this particular property that can support a caveat?”
A caveat can be a powerful way to protect an existing interest in property, but separation alone does not automatically give you a caveatable interest in property registered in your former partner’s name.
Your family law property rights and your rights under NSW land law need to be considered separately.
In some cases, a caveat may be appropriate.
In others, the better remedy may be an injunction or another order from the Federal Circuit and Family Court of Australia.
Urban Law Group advises clients about family law property settlements, caveats, equitable interests and urgent steps to protect property following separation.
This article was authored by Urban Law Group Principal Solicitor Katrene Halteh. Katrene regularly presents to the legal profession on the intersection between family law and property law, including the issues that arise when ownership, equitable interests and relationship breakdown overlap.
This article contains general information only and is not legal advice. Whether a caveatable interest exists depends on the individual circumstances and the legal basis of the claimed interest.