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Caveat

Caveat
A caveat is a legal document lodged at SLA by the caveat-or against a property in which the caveat-or claims an interest, the Land Titles Act allows anyone who claims an interest in the property to lodge a caveat and the Registrar of Titles will notify all parties when a caveat is lodged.





A caveat may be lodged by any party who claims an interest in the property and are usually:


1. Buyer who has paid a deposit and exercised option to buy a property


2. Financial institution which has granted a loan to the owner or buyer


3. CPF board when the funds from the CPF are released from owner's or the buyer's CPF account(s)


4. Lapse after 5 years unless extension


*Licensed money lenders are not allowed to lodge caveats on HDB flats,and creditors cannot lodge a caveat on the property unless they acquire a Court Order.


*The Purpose of a caveat is to give notice of interest of caveat-or to others, and to protect the unregistered interests during the transitional period before the buyer's interest is fully registered on completion.
**It also protects the interest of caveat-or by prohibiting registration of conflicting interests so as to prevent another buyer from lodging the same caveat before completion and also to prevent the seller from selling the property to another buyer after the initial buyer has exercised option.


Only upon sale of property /redemption of loan or by Court Order can a Caveat be removed.
Lodgement of Caveat is not compulsory but do note that registration is compulsory .


*What are Encumbrances?


Properties sold must be free from encumbrances which means that the Caveats lodged are encumbrances and there is a need to remove them before completion of sale.

Examples of encumbrances are:
1. Mortgage
2 CPF discharge
3. Outstanding property tax
4. Outstanding maintenance fees

*Owners need to settle them before transferring the property to buyers.

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