If you’re planning to buy a property in Singapore, it’s crucial to understand how to protect your interest in the property. One useful method is to include a caveat. A caveat is a legal document that informs the Singapore Land Authority (SLA) of your property interest.
This article serves as a comprehensive guide to lodging a caveat in Singapore, covering its purpose, process, duration, and potential challenges.
What is a Property Caveat?
A property caveat is a legal document filed by an individual or company with a stake in a piece of real estate. The caveator, the person lodging the caveat, notifies the SLA, which manages the national land registry, about their interest. The caveat is the property owner on whom the caveat is imposed.
Why Lodge a Caveat on a Property?
The main reason for placing a caveat is to notify the owner of your interest in a property. After making an initial payment and executing an Option to Purchase (OTP) or entering into a sale and purchase agreement, you can lodge a caveat to protect your interest in the property.
The caveat acts as a warning to potential buyers or sellers that there is a claim or interest that must be resolved before the property can be transferred. Caveats can also be used to safeguard other property rights, such as mortgages, leases, or easements.
When is a Caveat Usually Lodged?
In the property conveyancing process in Singapore, a caveat is typically lodged after the buyer exercises the OTP. This is the point when the buyer acquires an interest in the property. Placing the caveat at this stage protects your interest in the property until the deal is completed.
How to Lodge a Caveat in Singapore
To file a caveat, you must fill out a form available on the Singapore Titles Automated Registration System (STARS) lodgment site. Conveyancing solicitors typically undertake this step on the caveator’s behalf because they have access to the STARS lodgment system via a lodgement account. The form requires information about the caveator, caveats, registered proprietor, property description, and details of the claim. The application to lodge a caveat incurs a fee of $64.45 (including GST) per application. This price covers the expense of mailing the notice to the caveats but does not include the conveyancing attorney’s fees.
How Long Does a Caveat Last?
A caveat that has been successfully lodged is effective for five years from the date of lodgment. However, there are certain circumstances in which a caveat may lapse or cease to affect the property before the expiration of the five-year validity period.
One situation in which a caveat may lapse is when a deal in favor of the caveat is lodged and accepted by the SLA. The caveat has no impact on the registration of the dealing if the interest in the land affected by the dealing is similar to the interest in the proviso.
Another scenario is when a transaction that is banned by the caveat is filed. If someone attempts to register a transaction that the caveat prevents, the caveator is notified, and they have 30 days to obtain a court order extending the time of the caveat’s operation. If no court order is obtained, the caveat lapses, and the prohibited transaction is registered.
How to Extend a Caveat
Before the expiration of a caveat, the caveator’s conveyancing lawyer may seek an extension through the STARS lodgment system. The extension application must be on the same basis as the existing caveat, and if accepted, the caveat will be valid for another five years from the date of the extension lodgment. The fee for extending a caveat is also $64.45 (including GST) per application.
Withdrawing a Caveat
A caveator can choose to withdraw a caveat from the entire property or just a portion of it. To withdraw a caveat, complete the necessary withdrawal form and submit it using the STARS judgment site. Total withdrawal and partial withdrawal forms are available for this purpose.
What If Your Caveat Application is Unsuccessful?
If your application to file a caveat is denied, the SLA will notify you of the decision. If the rejection is due to deficiencies in your application, the SLA will also inform you of the specific areas that need rectification. You have 14 days from the date of notification to rectify the deficiencies; otherwise, your application will be deemed withdrawn.
Buying a Property with an Existing Caveat
Before finalizing a property purchase, property agents or conveyancing lawyers usually perform a title search to check for any pre-existing caveats. This search confirms that there are no impediments to you becoming the property’s new owner. A title search retrieves information from the Land Titles Registry, including ownership, address, property type, and encumbrances such as mortgages or charges. You can also conduct your title search using the Integrated Land Information Services (INLIS) website. For a fee of $5.25, you can access property ownership information by providing the property’s address.
Dealing with a Property That Has a Caveat
If you discover that the property you wish to purchase has a lodged caveat, you have a few options to address the situation. Firstly, you can negotiate with the property owner (the caveat) to obtain a court order summoning the caveator to explain why the caveat should not be removed. The goal of this procedure is to have the court order the removal of the caveat.
Alternatively, you can request that the SLA cancel the caveat through the STARS lodgment portal if it was lodged vexatiously, frivolously, or not in good faith. The SLA will notify the caveator, who will then have 30 days to seek a court order to keep the caveat on the land register. Failure to obtain a court order results in the cancellation of the caveat.
Conclusion
Lodging a caveat is an essential step in protecting your interest in a property during the conveyancing process in Singapore. By understanding the purpose, process, and potential challenges, you can ensure that your interest is safeguarded until the completion of the transaction.
Engaging a conveyancing lawyer can provide valuable guidance and assistance throughout the process, from necessary checks to obtaining court orders when necessary. Take the necessary steps to protect your interest and enjoy a smooth property purchase experience in Singapore.