Property and divorce lawyer Johor Bahru

Lodging a caveat is not a trivial act to be undertaken lightly. It has immediate legal effect and can have significant commercial and financial consequences. Caveats act as an injunction preventing the registration of dealings, i.e sale, transfer, mortgage or charge. This means that when filing a caveat the client must be ready, if necessary, to demonstrate to the Court that there is a serious question to be tried that the interest in land which is asserted in the caveat exists.

Type of caveats:-

  1. Registrar Caveat;
  2. Private Caveat;
  3. Trust Caveat;
  4. Lienholder Caveat

This article will be focuses on private caveat.

Demonstrating Caveatable interest

A caveat can only be lodged to protect a proprietary interest in title of a land pursuant to s 323 of the National Land Code 1965. This interest must be “any person or body claiming title to, or any registrable interest in, any alienated land or undivided share in any alienated land or any right to such title or interest.”

Common examples of caveatable interests may include, but are not limited to,

  1. The interest of a purchaser under a contract for the sale of land;
  2. The interest of a mortgagee, whether legal or equitable;
  3. The interest of someone claiming an easement over a piece of land;
  4. The interest of a chargee;
  5. The interest of a landowner with the benefit of a restrictive covenant burdening the subject land;
  6. The interest of a lessee under a lease, or an agreement for a lease;
  7. The interest of a person arising from contributions made to the purchase price of a property.

    The caveatable interest must be an interest in land, a caveat cannot be lodged to protect a contractual or personal right, or a statutorily-based right that does not confer an interest in land. Mere personal debt, money or shareholder dispute which have nothing to do with the land shall not be recognised as caveatable interest.

    Similarly, a caveat cannot be lodged to protect what is a claim to exercise a cause of action, i.e future family provision claim. A person only has an interest in the matrimonial property until and unless the subject matter has been disposed and determined by court of law.

Procedure of Lodgment of Private Caveat

Any aggrieved person would be able to lodge a private caveat in land office either by himself or a lawyer via Form 19B (application for lodging caveat), together with a statutory declaration duly affirmed by the “Caveator” specifying “the prescribed particulars” of the interest the Caveator claims. The reason for doing this is to enable the registered proprietor to know the claim that they need to meet, and the Registrar may determine if a dealing lodged for registration is inconsistent with the interest claimed by the Caveator.

Validity of a Private Caveat

A private caveat shall remains effective for 6 years until and unless removed by the Caveator himself/herself (Form 19G) ,or by Registrar or Court.

S.328 Lapse of private caveats

(1) A private caveat shall, if not sooner withdrawn under section 325 or lapsing pursuant to sub-section (1B) of section 326 or removed by the Registrar pursuant to an order of the Court under section 327, lapse at the expiry of six years from the time from which it took effect, and the entry thereof may be cancelled accordingly by the Registrar, either of his own motion or on an application in that behalf by any interested person or body.
(2) Every cancellation under sub-section (1) shall be signed and sealed

Removal of Caveat by Registrar

The registered proprietor may apply to remove the caveat by filling up (Borang 19H) required under S. 326 of the National Land Code.

S.326 (1) Removal of private caveats by Registrar.

(1) Any person or body whose land or interest is bound by a private caveat may at any time apply in Form 19H to the Registrar for its removal, and such application shall be accompanied by the prescribed fee.
(1A) On receiving any application for removal under this section, the Registrar shall-
(a) serve upon the person or body at whose instance the caveat was entered a notice of intended removal in Form 19C; and
(b) make an endorsement on the register document of title that the notice in Form 19C has been served on the person or body at whose instance the caveat was entered and of the date of such service, and shall sign and seal the endorsement.
(1B) In the case in which a notice of intended removal in Form 19C has been served under sub-section (1A), the caveat shall lapse and be of no effect at the expiry of two months specified in the notice unless before the expiry of that period the Registrar shall have been served with an order of the Court extending the time provided in the said notice.

Removal of Caveat by Court

S.327 Removal of private caveats by the Court.

(1) Any person or body aggrieved by the existence of a private caveat may at any time apply to the Court for an order for its removal, and the Court (acting, if the circumstances so require, ex parte) may make such order on the application as it may think just.
(2) The Registrar shall, on being duly served with any order under this section for the removal of a caveat, cancel the entry thereof on the register document of title, and note thereon the reason for cancellation and the date thereof.
(3) Every cancellation under sub-section (2) shall be signed and sealed.

The test which the Court applies are:-

  1. whether the Caveator had a caveatable interest;
  2. whether the Caveator’s claim raises serious question to be tried;
  3. whether the balance of convenience or the justice lies in favour of Caveator for the caveat to be remained on the registry pending disposal of suit.

Right to ask compensation

S.329 Compensation for wrongful caveats

(1) Any person or body who, wrongfully or without reasonable cause, secures the entry of, or fails to withdraw, any private caveat shall be liable to pay compensation to any person or body who thereby suffers any damage or loss.

limitation on repeated applications

S.329 limitation on repeated applications

(2) Where the Court has ordered the removal of any private caveat under section 327, or has refused an application under subsection (2) of section 326 for an extension of time with respect to any such caveat, or where the Registrar has removed any caveat pursuant to sub-section (3) of section 326, the Registrar shall not entertain any application for the entry of a further caveat in respect of the land or interest in question it is based on the like claim as that on which the former one was based.

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