Property development – Successful removal of caveat

When selling property, it is critical to be able to transfer title. 

Before signing an agreement, a seller (and buyer) should check the title for any mortgages, caveats or administrative advices. If the seller is unable to transfer title, without having disclosed the reason and inserting protections in the contract:

1.  the buyer will not be obligated to proceed; and
2.  the seller is at risk of receiving a significant claim for damages.

The damages are likely to be substantial, especially in transactions involving commercial property or property earmarked for development. 

In January 2022, we removed a caveat placed on the title of vacant land, sold to a property developer and which was scheduled to settle in the first week of February.  The work involved urgent attendances on examining underlying claims allegedly supporting the caveat and extensive communications with a liquidator, the Australian Securities and Investments Commission and Queensland Titles.

The outcome was as best our client could have hoped for. The caveat was withdrawn by consent and urgent proceedings to the Supreme Court were avoided, as well as any delays or possible termination of the sale.  This was also an important reminder for buyers and sellers to carefully check title deeds before signing agreements involving property.