NSW Buyers and Caveats — When Another Person’s Dispute Becomes Your Settlement Problem

When you make an offer on a property, your focus is natural: building, price, location. Yet the title search may show something that has nothing to do with you – a caveat lodged by someone you have never met. That caveat represents a dispute between other people, but unless it is resolved properly, it can block your transfer being registered and your mortgage being put in place.

Third‑party caveats often reflect unfinished business: a beneficiary unhappy with an estate, a former partner claiming an interest, a lender or investor who feels unpaid, or a family member asserting a contribution. For your purposes, the important question is not who is right, but whether their claim will stop your settlement or leave your title compromised.

The first step is to understand the nature of the claim. You or your adviser should obtain a copy of the caveat and any relevant documents the seller can provide. This might include loan agreements, deeds of family arrangement, court orders or correspondence. Knowing whether the dispute is already on its way to resolution – or only just emerging – informs how you approach timing and conditions.

The next step is to negotiate contractual protections. These often include:

• A requirement that the caveat be withdrawn by a certain date before settlement.

• A right to rescind or extend settlement if the caveat is not withdrawn on time.

• An obligation on the seller to provide evidence of any orders or agreements that underpin the removal.

In some cases, contracts also direct the payment of part of the purchase price to a person who lodged the caveat as part of a settlement. That is usually arranged through joint directions from lawyers at settlement so that the caveat can be withdrawn contemporaneously.

An example can illustrate the stakes. You are buying a property from three siblings. One sibling has lodged a caveat saying they did not receive a fair share of the estate when the property passed to the others. The sellers assure you it’s “just a family issue”. If you sign without protections, they may struggle to resolve the dispute before your settlement date. Your lender may refuse to advance funds while the caveat is on title. You may find yourself choosing between costly extensions and walking away, with removal costs and other expenses wasted.

Alternatively, if your contract clearly states that the caveat must be removed by a fixed date, and that you may terminate with your deposit refunded if it is not, you retain control. You can monitor the situation with your adviser, assess progress, and only commit fully once you are confident the title will be clear.

Ultimately, other people’s disputes only become your problem if you proceed without understanding them. Ask questions early, build sensible conditions into your contract, and be prepared to walk away if the risk profile becomes unacceptable. There will always be another property. There may not be another chance to avoid inheriting a dispute you had no part in creating.

Declaration: This article provides general information for NSW property buyers and is not legal advice. You should obtain advice specific to your transaction before proceeding with any property affected by a caveat or other title dispute.