Caveats, covenants and easements can be applied to properties and they affect how the property is used.
A caveat is a document that any person with a legal interest in a property can lodge at the relevant state authority. A caveat note will then appear on the title held by the land register (but not on the one held by the landowner), giving anyone with interest notice that a third party claims rights over the land. Caveats prevent any future registering of interests without your consent.
Caveats can also be lodged and withdrawn online through PEXA (Property Exchange Australia Ltd) by lawyers or licensed conveyancers who are PEXA subscribers.
Most Australian states have a simple process for the preparation, lodgement and acceptance of caveats. As a result, caveats are often lodged without legal advice. The relevant state authority will accept a caveat if the form has been completed properly and a supporting document or declaration has also been lodged. This does not mean the caveat is valid.
Various aspects must be considered before preparing and lodging a caveat on property, otherwise it may be invalid – so it will not protect your interest and will expose you to a compensation claim. Different rules apply in each state, so always check with a lawyer to ensure your caveat is valid.
Many interests in land are sufficient to support the lodgement of a caveat, including: as purchaser under a contract to acquire the land; as tenant of the land; or as chargee of the land. Other interests are considered ‘caveatable interests’ and some are not, so it is important to seek legal advice on whether you qualify.
Different types of caveats can also be lodged (for example, ‘absolute caveats’ and ‘subject to claim’ caveats), and the choice of type is important because if you lodge the wrong one, a court may consider your caveat invalid – despite that you have a valid caveatable interest – and order its removal. The court may also require you to pay compensation to the landowner.
A covenant is a written agreement between the seller and purchaser of a piece of land, restricting how the land can be used. For example, restricting the type of building material the purchaser can use.
Property developers and individuals often use restrictive covenants to preserve the value of their property. For example, a landowner may enter into a restrictive covenant with a neighbour, preventing them from erecting structures that may obstruct their view. Covenants are enforced by contract.
Easements are rights that entitle the specific use and access of privately owned land. This results in the relationship between a dominant tenement, which benefits from the easement, and a servient tenement, which is burdened by the easement.
While an easement confers limited rights to land use, it does not confer general possessory rights to the owner of the dominant tenement. Common examples of easements are drainage, sewerage and carriageway easements.
For an easement on property to be enforceable as a legal interest, it must be registered on the property title or specified in legislation.