In NSW, you need to have a valid reason to lodge a caveat. check out the Land Titles office website. Once listed they cannot be removed without the agreement of the lodging party or a court order. I don't think there is any requirement to inform the first mortgagee, but there might be something buried in the mortgage contracts about this - they wouldn't know anyway. Once the caveat is on, the property cannot be sold, mortgaged or loan increased etc without it being removed. If the loan needs to be increased, the caveat could be removed and relodged.
Also if the caveat is lodged in relation to money lending, the LTO is insisting the relevant stamp duty be paid to the OSR on this loan.
If someone has a loan 'secured' by a caveat on a property, this is not very safe, but it is better than nothing. IF there is a default on the loan, the lender could take legal action suing the borrower. Once a judgment is obtained, then a court order could be obtained to sell property, garnish wages etc. All this could still be done without a caveat however. The value of the caveat is that it could prevent property being sold and the proceeds disappearing.
Also if the caveat is lodged in relation to money lending, the LTO is insisting the relevant stamp duty be paid to the OSR on this loan.
If someone has a loan 'secured' by a caveat on a property, this is not very safe, but it is better than nothing. IF there is a default on the loan, the lender could take legal action suing the borrower. Once a judgment is obtained, then a court order could be obtained to sell property, garnish wages etc. All this could still be done without a caveat however. The value of the caveat is that it could prevent property being sold and the proceeds disappearing.
