Lodging a Caveat in Family Law

As a law firm, we are asked a great deal about lodging a caveat because someone or some company owes a debt or perhaps in a family law matter. This article seeks to discuss when and why an ‘equitable right’ exists to lodge or place a caveat on a title that is not your property.

Understanding Caveats

A caveat is a legal notice placed on a property’s title at Land Use Victoria. Once recorded, it signals to others—like prospective buyers, lenders, or investors—that someone (the “caveator”) claims a legal or equitable interest in that property. While it doesn’t create an interest in its own right, it operates to prevent the registered owner from dealing with the property (e.g., selling or further mortgaging) until the caveat is removed or expires.

Why is a caveat even used?

Protective Measure: A caveat functions as a protective shield to ensure the property is not disposed of without the caveator’s claim being addressed.
No New Rights: Registering a caveat does not grant fresh property rights; it merely preserves pre-existing ones.

Caveatable Interest

Under section 89(1) of the Transfer of Land Act 1958 (Vic), one must have a “caveatable interest” to lodge a caveat. A common example is when someone has signed a contract to purchase real estate, giving them an equitable interest that can be protected by a caveat.

Just because you were [or are] married, in a de facto relationship, or involved in Family Law proceedings, this does not automatically give someone a caveatable interest. The Family Law Act 1975 (Cth) redistributes property interests. In family law matters, a caveat is often lodged based on an implied, resulting, or constructive trust.

If you contributed all or part of the purchase money for the property, or you have assisted made mortgage repayments, yet you are not listed on the title or your contribution is otherwise not reflected.

You financially or non-financially improved or maintained the property (for example, paying the mortgage, funding renovations, or undertaking significant DIY projects). Even if your payments or efforts were not directly poured into the property, your broader contributions—such as being the primary caregiver—could amount to a claim. Courts may find that denying you an interest would be unjust, provided your efforts were substantial and enabled the other person to acquire or maintain the property.

Esstoppel

If the registered owner led you to believe you would at some point be placed on title and you acted in reliance on that promise to your detriment, you might have grounds under a constructive trust or equitable estoppel.

There is risk in lodging a caveat. If the property owner lodges a case with the Supreme Court of Victoria to remove the caveat saying that you do not have a valid reason to have lodged it, this may expose you to compensation claims if the property’s owner suffers losses. Additionally, if the Court deems the caveat was lodged improperly, you (and potentially your law firm) may be responsible for covering the owner’s legal costs.

Why Lodge a Caveat in Family Law?

Safeguarding the Asset Pool

Ensuring the property is not sold or encumbered helps accurately identify and value the assets during property settlement.

Preventing Unilateral Transactions

A caveat can prevent one spouse from quickly transferring or selling the property and placing assets out of reach.

Strengthening Your Negotiating Position

Knowing the property cannot be disposed of may encourage more cooperative settlement discussions.
Important Caveat: Stopping the property from being sold does not necessarily stop the owner from taking further borrowings or drawing down on an existing mortgage. That aspect typically needs to be tackled separately in family law negotiations or in court.

Alternatives to Lodging a Caveat

There are times when lodging a caveat may not be the ideal solution, especially if your basis for claiming an interest is weak or unclear. Possible alternatives include:

Injunction may be Better

Under section 114 of the Family Law Act 1975 (Cth), you can apply to the Federal Circuit and Family Court of Australia for an interim injunction preventing dealings with certain property. You can also seek interim orders to preserve other valuable assets (not just real estate) during the property settlement process.

Before lodging a caveat, confirm that you genuinely hold (or reasonably believe you hold) a legal or equitable interest in the property. Consider seeking legal advice to verify your position and explore the most effective way of safeguarding your interests—whether that be a caveat, an injunction, or another strategy under the Family Law Act.

As this article is intended for general informational purposes and should not be taken as legal advice, we ask you to contact Cogent Legal for better advice that takes into account your unique circumstances.