Life circumstances and relationships can be unpredictable. It can be easy to make hasty decisions when it comes to moving in with a partner, getting married or purchasing a property together.
In both de facto relationships and marriages, it’s a very common occurrence for a property to end up in one person’s name. This leaves the other person who is not on the title with the risk and fear of losing out on the benefits of the property, despite any contributions they may have made towards it over the years, if the relationship were to breakdown.
If you have shared a property with a partner which was only contracted in their name and your relationship has ended, you may have a ‘caveatable interest’ in the property in order to lodge a claim, and protect your legal entitlements. Caveatable interests come in many forms but in order for one to be viable, the caveator (person lodging the caveat) must have some current legal or equitable interest in the property.
Lodging a caveat means your former partner cannot sell or borrow against the property without coming to a settlement with you first. However, you cannot just lodge a caveat if you feel you’ve been wronged because there are several penalties for lodging one without reasonable cause, so it’s really important to be cautious and seek legal advice beforehand.
Here are the guidelines of what you need to know about caveats in the instance that your relationship has ended:
What is a Caveat?
Lodging a caveat can be more complicated than you might think, and if done falsely can result in financial penalties. Always seek advice from a respected lawyer before you record a caveat.
The word caveat means ‘beware.’ A caveat is a document that any person with a legal interest in a property can lodge at Land Use Victoria. After recording, a caveat note appears on the title of the property, giving anyone dealing with the property notice that someone is claiming rights over it.
Most commonly when a relationship ends and the property is only in one partner’s name, a caveat is lodged because the other person is owed money, or they are seeking compensation because of their contributions to the property. However, having been in a marriage or a de facto relationship alone does not always give you reasonable cause to lodge a caveat. This must be determined under certain legal grounds.
What are the Grounds for Lodging a Caveat?
There are 44 available grounds for lodging a caveat in the state of Victoria. When it comes to Family Law matters, the majority of caveats are lodged on the basis of a constructive trust. A constructive trust is a duty by one person to hold some property for another person. A constructive trust is set up by a court as an equitable remedy (at the court’s discretion).
The most common reasons for a caveator to assert a trust in court include:
- They have made contributions to the value of the property which are not reflected on the title.
- They formerly transferred the property or their part of it to their spouse or partner.
- They have given financial contributions such as mortgage repayments.
- They have dedicated non-financial contributions such as hours of labour to maintain or improve the property.
- They were led to believe they had an interest or claim to the property from their partner.
For example, a typical scenario in court may involve a mother who has taken care of the children and household duties while the father has undertaken a career and contributed to the household financially. If the mother’s contributions have allowed the father the freedom to acquire financial gains and properties during the relationship, the mother can make a claim.
Why do I need Legal Advice for a Caveat?
Prior to recording a caveat on a property which is not in your name, you must always seek legal advice for your personal and financial sake. You may feel you have a caveatable interest on a property, but your individual circumstances may not hold up in court without professional guidance. Taking matters to court can also be costly and false claims can result in penalties, so you want to ensure that you are well informed about the complexities involved in lodging a caveat well in advance.
Do you think you have a caveatable interest on a property? At Le Brun & Associates, our experienced and compassionate family and property lawyers can help you lodge a caveat. We understand lodging a caveat is a sensitive matter, particularly in the event of a relationship ending. That’s why our team are dedicated to supporting you with accurate, fast and cost-effective advice.
Contact us today for your FREE 30-minute consultation to discuss your best options.
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