Caveat is a formal legal notice to the whole world that the Caveator (i.e. the person lodging the Caveat) has beneficial or registrable interest in a particular property or land.
Section 173 of the Land Code (Cap. 81) permits the entry of a Caveat by any person who claims to be entitled to or beneficially interested in any land. Caveat has the effect to prohibit or suspend the registration of any instrument of dealing of the property or land concerned so long as the Caveat remains in force until it is removed, withdrawn or lapsed under Section 178 of the Land Code.
An advantage of lodging a Caveat against a property or land is to prevent the possibility of multiple or subsequent sale(s) or unscrupulous dealing(s) of the said property or land, thus protecting the Caveator’s interest in the said property or land pending the registration of his interest at the land registry office concerned.
For an end-financing facility granted by a financier to part-finance the purchase of a property pending the issuance of an individual title, obviously it is prudent for the End-Financier to lodge a Caveat [in Form O of the First Schedule of the Land Code] against the said sub-divided lot in stating the End-financier’s security interest with a condition that such Caveat shall not affect or forbid the process of mutation subdivision and the issuance of new issue document of titles to the subdivided lots of the parent lot(s).
In the old days, once the parent title(s) approved for various sub-divided lots is subject to multiple caveats in a development project, the consent of all the Caveators were required where it was obviously a very tedious process to get all the Caveators to sign on the Memorandum of Surrender and Re-Alienation in order for the individual titles to be issued accordingly after payment of the land premium. Thus, most of the developers disallowed any purchaser or his end-financier to lodge a caveat on the sub-divided lot concerned and occasionally end-financiers would be required to waive the requirement of lodging a Caveat against the sub-divided lot pending the issuance of individual title thereof. Without the lodgment of a Caveat in the aforesaid scenario, both the interest of the purchaser and end-end financier might be in jeopardy particularly when it involved disputes on multiple sale(s) or assignment(s) of the sub-divided lot.
Since few years ago, there has been a specific standard form of Caveat where the following terms have been incorporated in the Caveat to be lodged on a sub-divided lot pending the issuance of the individual title thereof:-
“FORBIDS THE REGISTRATION OF ANY DEALING WITH THE ESTATE OR INTEREST OF THE ABOVENAMED CAVEATTEE/REGISTERED PROPRIETOR OF THE SAID LAND until this caveat is withdrawn by me or is otherwise removed or lapses in accordance with the provisions of the Land Code (Cap. 81) PROVIDED that this caveat shall not affect or forbid the process of mutation subdivision and the issuance of new issue document of titles to the subdivided lots of the said land in the name of the registered proprietor subject to this caveat AND PROVIDED FURHTER that written consent from me is deemed to have been given for the matters mentioned in the provision aforesaid.”
Based on our recent experience in few development projects handled by our firm, followed from the issuance of the Memorandum of Surrender and Re-Alienation and the payment of the land premium specified therein, individual or separate titles of all the subdivided lots have been issued by the Land and Survey Department without the consent of any Caveator for the obvious reason that it has been stated in the above Caveat form that consent of the Caveator is deemed to have been given in such situation.
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