caveat headache!

[jsoe]

Hi,
The IP we bought is due to settle on the 13th Friday. (gosh!)
There's a caveat on the property for $30k. My solicitor said it'll be discharged at the time of settlement. My bank manager said it should be discharged before settlement as the bank doesn't accept security with a caveat attached to it, or the solicitor has to issue a Letter of Undertaking.

How are these issues usually settled and what are the order of events?
Because I thought the vendor will pay off debts with settlement money, and only then the caveat will be discharged. But if the bank is not wanting this caveat attached, what is the option?
My solicitor is reluctant to issue a Letter of Undertaking - does this put her in a position where she's responsible for the vendor's action? This seems unfair for her and no wonder she's reluctant to issue the Letter.

Has anyone come across this? We don't want to be stuck in the middle having to bear consequences of something that's beyond our control.
Thanks heaps!

 

[boomtown]

Its the vendors problem to clear the caveat not yours. Let your solicitor handle it.

 

[Aaron_C]

The vendor has to issue the letter of undertaking because banks HATE caveats as it creates uncertainty on the security.

 

[jsoe]

so it's the vendor's solicitor who has to issue the Letter of Undertaking? Not my solicitor? It makes more sense this way.

So, if my bank refuses to settle because the caveat is still outstanding, it's actually the vendor's fault for not clearing the caveats?

 

[Peter_Tersteeg]

I wouldn't be concerned about it. It's definitely the vendors responsibility. If it doesn't settle on time, you'll still get the property, but you won't have to start paying the mortgage until settlement occurs.

 

[boomtown]

So, if my bank refuses to settle because the caveat is still outstanding, it's actually the vendor's fault for not clearing the caveats?

it would be more accurate to say YOU refuse to settle because the vendor is not giving you clean title. It will be a condition of your sale contract that the vendor has to give you clean title and if they don't then they are in default (unless you have somehow signed a very strange sale contract but I think heat unlikely).

 

[Terry_w]

This should concern you. Was it there when you exchanged?

Why is it there? Just for a debt-not usually. You must have a copy of the caveat and this will list the basis on which it is listed so check that out. If it relates to family law issues don't expect to settle on time.

 

[Marjac]

Just as if there is a Mortgage on the property a withdrawal/release of Caveat will/should be provided at settlement.
It is the vendors responsibility to provide clear Title.

However as Terry above has mentioned the Caveat may not be just to secure a debt and could be for a Family Law matter or otherewise.
Your solicitor should obtain a copy of the Caveat top establish the reason/cause for its lodgement.

 

[hysterical]

Hi,
The IP we bought is due to settle on the 13th Friday. (gosh!)
There's a caveat on the property for $30k. My solicitor said it'll be discharged at the time of settlement. My bank manager said it should be discharged before settlement as the bank doesn't accept security with a caveat attached to it, or the solicitor has to issue a Letter of Undertaking.
!

So, have you managed to settle last Friday ?

Cheers