Why and How to Lodge a Caveat on a Property in Singapore
What is a Caveat?
A caveat is a legal document lodged with the Singapore Land Authority (SLA) by a person with an interest in property (or land). The person who lodges the caveat is known as the “caveator“, while “caveatee” means the owner of the property which is the subject of the caveat.
When are caveats usually lodged? Why lodge a caveat on a property?
Caveats are usually lodged to protect the buyer’s interest in the property after he has paid a deposit and either exercised an Option to Purchase (OTP) or entered into a sale and purchase agreement in relation to the property.
It is a precautionary step taken by the caveator pending completion of his transaction.
Although not compulsory, the lodgement of a caveat serves to prevent any further dealings with the property. This protects the caveator’s interest in the property until it is officially conveyed to him as the new owner.
Who Can Lodge a Caveat in Singapore?
Under the Land Titles Act, a caveat may be lodged by any party who claims an interest in the property. Such parties may include:
- A buyer who has paid a deposit to buy a particular property;
- A bank which has granted a mortgage loan to the property owner or the buyer, and lodges a caveat in its capacity as the mortgagee
- The CPF Board when it releases CPF funds from the CPF account(s) of the property owner or buyer, and lodges a caveat in its capacity as a charger
How Caveats are Lodged in Singapore
Caveats are lodged with the Land Titles Registry of the SLA, using the prescribed form available at the Singapore Titles Automated Registration System (STARS) eLodgment website. This is done by conveyancing lawyers on behalf of the caveator, as conveyancers have access to STARS eLodgement through a lodgement account.
The prescribed form requires details such as:
- The caveator and caveatee’s particulars;
- A description of the property that is the subject of the caveat; and importantly,
- The grounds of the caveator’s claim to the caveat. Such grounds include an OTP which has been exercised by the caveator and/or a sale and purchase agreement.
You can download a sample of the prescribed form here.
Once a caveat is lodged and accepted by SLA, SLA will notify the caveatee of this.
When Will the Caveat Take Effect?
A caveat which has been processed and accepted by the SLA will take effect from its date of lodgement.
How Long Does a Caveat Last?
A caveat which is accepted by SLA is generally valid for 5 years from the date of its lodgement.
However, if a transaction prohibited by the caveat is lodged (e.g. if the existence of a caveat prevents the registration of any instrument affecting the property, but someone tries to register, for example, a lease or a mortgage), SLA will notify the caveator of this.
The caveator then has 30 days from the date on which he is notified by SLA to obtain a court order extending the operation of the caveat. The prohibited transaction will also be blocked from going through. If such a court order is not obtained, the caveat will expire at the end of that 30-day period and the transaction will be registered.
Can a caveat be extended?
Before a caveat has lapsed, the caveator’s lawyer may apply to SLA for an extension by submitting an online extension of caveat form through STARS eLodgement on his/her behalf. A sample of the extension of caveat form is available here.
If the extension application is accepted by SLA, the caveat will be valid for another 5 years from the date of the lodgement of the extension of caveat form.
What is the Cost of Lodging or Extending a Caveat?
The cost of either lodging or extending a caveat is currently S$64.45 (GST-inclusive). This includes the cost of sending notice to the caveatee but excludes the conveyancing lawyer’s fees for lodging or extending the caveat on the caveator’s behalf.
Can I Withdraw a Caveat Lodged and How?
A caveat can be withdrawn by the caveator either in respect of the whole property that is subject to the caveat (i.e. a total withdrawal of caveat), or just part of the property (i.e. a partial withdrawal of caveat).
To withdraw a caveat, the relevant form (either a total withdrawal form or partial withdrawal form) has to be submitted through STARS eLodgement. This is usually done by lawyers on behalf of the caveator. A sample of a total withdrawal form and a partial withdrawal form is available here and here, respectively.
What If a Property I Wish to Buy Already Has a Caveat On It?
Before you sign the papers to purchase property, the property agent or the lawyers involved would perform a title search for you to ensure that there are no pre-existing caveats on the property. This is because such caveats may block you from becoming the property’s new owner.
A title search determines the legal owner of a property, and discovers any claims made on the property. It retrieves information from the Land Titles Registry, such as ownership, address, type (e.g. residential or commercial), and encumbrances (e.g. a mortgage or charge over the property).
You may also perform a title search yourself if you wish. To do so, please visit the Integrated Land Information Services’ (INLIS) website.
The Urban Redevelopment Authority’s (URA) website also offers a search function for the discovery of private residential property transactions with caveats lodged.
If you discover that the property you want to purchase has a caveat lodged against it, the owner of the property (i.e. the prospective seller) can, in his capacity as caveatee, resort to the following remedies:
- Obtain a court order for the caveat to be removed; or
- Apply to the SLA through STARS eLodgement to cancel the caveat, on the basis that the caveat had been lodged vexatiously or frivolously or not in good faith. Once the application has been made, SLA will inform the caveator. Within 30 days of SLA’s notification, the caveator has to obtain a court order for the caveat to remain on the land register, failing which, the caveat will be cancelled.
Lodging a caveat can be a complicated affair, depending on the circumstances of the property in question. You may consider getting in touch with one of our conveyancing lawyers to assist you with this.
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