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Adamas University: Role of Caveat in Property Agreements
Adamas University: Role of Caveat in Property Agreements
Adamas University: Role of Caveat in Property Agreements
ROLE OF CAVEAT IN
PROPERTY
AGREEMENTS
CONTRACT ASSIGNMENT
ROLE OF CAVEAT IN PROPERTY AGREEMENTS WITH BRIEF ANALYSIS AND PROCEDURES
TAKEN STEP BY STEP.
NAME-DIPESH BHATTACHARYYA
ROLL-03 , BBALLB(H)
SUBJECT-CONTRACT
4/27/2018
CONTENTS;
INTRODUCTION
ACKNOWLEDGEMENT
INTRODUCTION;
A caveat is a document which is lodged against a title to land and is
notice by an interested party that no action is to be taken in relation
to that title until that party’s interest has been taken into account. The
main purpose of a caveat is to prevent the sale or disposition of the
land until the issue of the interest under the caveat has been protected
or perfected.
The most common form of caveat is the caveat against dealings with a
particular piece of land.A caveat is commonly used in the breakdown
of relationships so that one party can preserve their interest in a
property which may be in the name of the other party, but where both
parties had made contributions to the property and the relationship.
A caveat must include (among other things):
The name and address of the caveator (the person who lodges the
caveat);
The name and address of the caveatee (the registered owner) and any
other party having an interest in the property (for example, any
mortgagee);
The interest claimed by the caveator; and
The grounds on which the interest is claimed.
The caveat must be signed by the caveator or on or behalf of the
caveator by the caveator’s solicitor.
Because of the significance and impact a caveat may have, we require
all caveats to be signed by the client (the caveator).
2. WHO IS A Caveator
a) The name of the person who is claiming an interest in the land is
required. A "person" includes a corporation (6) but not a partnership
or trade name as neither is a person at law as required by section
130. Corporate caveators must comply with section 27.
b) Where a person is claiming an interest "as agent for" or "on behalf
of" or "as receiver and manager of" a disclosed principal, the
principal is the caveator. In the case of a receiver and manager this
information should be entered in document particulars.
c) Where a person is claiming an interest as “trustee in bankruptcy”
of a disclosed principal and the bankruptcy endorsement is not
registered on the title, then the principal is the caveator. The
bankruptcy trustee must be entered in document particulars.
d) A caveat cannot be filed on behalf of an undisclosed principal. (7)
If it is not clear from the caveat who is claiming the interest, the
caveat should be rejected for clarification. Although the addition
(occupation) of the caveator is required by statute, it's omission is not
a reason for rejection.
3. What is an interest?
An interest means:
The main point is that the interest has to be an interest in the land and
not just some right against an owner of land. For example, an
unsecured creditor has only personal rights against the debtor and
therefore has no automatic right to lodge a caveat against the title to
the debtor’s land.
The following list represents some interests claimed which are not
caveatable: (17)
a) promissory note (unless land is specifically charged)
b) personal loan (unless land is specifically charged)
c) builders' lien (to be registered by way of builders' lien as there is
no lien unless the requirements of the Builders' Lien Act are complied
with)
d) creditor pursuant to a writ of enforcement (18)
e) any interest in untitled land (19)
f) any interest in minerals registered in the name of the Crown in the
right of Alberta (20)
g) solicitor's lien (unless land is specifically charged by agreement)
h) security interest in chattels (21)
i) mortgage administration agreement
j) brokerage or appraisal agreement (unless agreement specifically
charges land)
k) guarantee of mortgage (unless guarantor has paid the mortgage
debt) (22)
l) assignment of proceeds of future sale or proceeds of a mortgage
(unless land is specifically charged by the agreement) (23)
m) beneficial interest by virtue of being a limited partner (24)
n) interest in part of a parcel (unless it has subdivision approval or is
exempt from subdivision approval)
o) participation agreement (unless an interest in land is granted
under the agreement)
p) claim under the Matrimonial Property Act (to be registered by way
of certificate of lis pendens) (25)
q) development agreement (unless pursuant to a specific section of
Part 17 of the Municipal Government Act or it creates an interest in
land such as a charge)
Lapsing of a caveat
The registered owner may serve a notice requiring the caveator to
initiate court proceedings to establish the interest claimed in the land
within 14 days of receipt of the notice. The registered owner must also
notify the Registrar of Titles that such a notice has been issued.
If the caveator receives such a notice, the caveator must do two things
to stop the caveat lapsing:
Withdrawn by caveator
The person who lodged the caveat can register a withdrawal of
the caveat and the caveat will then be withdrawn from the title to
the land.
Lapse
The owner of the land or a person having an interest in the land
can apply to the Registrar-General of Land (“RGL”) for the
caveat to lapse.
The RGL will then give the caveator notice of the application to
lapse the caveat. Once the caveator receives notice that an
application has been made to the RGL, then the caveator has 14
days to notify the RGL that an application has been made to the
High Court to sustain the caveat.
If the caveator does not notify the RGL that an application has
been made to the High Court to sustain the caveat, then the
caveat will lapse.