Relevant legislation:
- Transfer of Land Act 1958 Part V Division 1 (particularly s. 89; and ss. 89A and 90(3) re removal of caveats)
- See Department of Sustainability and Environment for relevant guides and forms.
A caveat may be placed on land to notify of the older person’s potential interest in a property that they had transferred or that they have partly paid for in an informal exchange for care, so that they can continue to live in what was once their home or be cared for in their adult child’s or family member’s new home.
The use of a caveat to prevent any further dealings by the Registrar of Titles on the relevant property may be seen, however, as a provocative act and should be dealt with tactfully where the preservation of family relationships is a priority.
What is your client seeking to achieve?
Is a caveat needed?
Practitioners need to be confident that a caveat is justifiable and take care not to risk taking on a liability for lodging a caveat without reasonable cause (ss. 118 and 119 Transfer of Land Act 1958).
Is there an immediate need to lodge a caveat?
Explain the advantages and disadvantages to your client and let them decide. If in your judgment the lodgment is not legally justifiable, and your client insists, you should direct them to lodge the caveat themselves, after fully explaining the risks.
Is there a caveatable interest?
There must be ‘an estate or interest in land’ and a caveat which will temporarily forbid dealings with the relevant land must be lodged in an ‘approved form’. You need to properly describe the interest claimed. For example, is it a constructive or resulting trust or an equitable charge?
You also need to be prepared to defend the caveat application.
Case study
A woman is asked by her adult children to move out of the house she has helped to pay for – no money to relocate
Norma, a 71-year-old woman, was pressured by her son and daughter-in-law to provide them with $100,000 to enable them to buy a new house, on the understanding that Norma could live with them into her old age. Norma was asked to move out after only six months of this arrangement because relationships had broken down and Norma was frequently at the receiving end of verbal abuse. Norma had no money to move.
Considerations:
- Does Norma have an equitable and caveatable interest in the property?
- Was it a gift or a loan?
When an older person passes property or other assets to their children the presumption of advancement may arise – where the voluntary transfer of assets to children is presumed to be a gift. (See Equity.)
Centrelink gifting rules may also be relevant. (See Centrelink issues.)