Mortgagee Sale/ Caveat

Hi, I need some advice.
As part of my divorce proceedings I agreed to sign over a proprty 100% to my ex for a one off payment from him, as per a ruling in the family law court. I WAS NEVER PAID.
Subsequently my ex has declared bankruptcy, and the bank as taken the house. I placed a caveat on the title prior to all this happening. I notice the property has been sold and is now under contract
Because my ex declared bankrupty after the bank reposesed the house, what are my rights. Am I entitled to claim on the sale or will the be allowed to lapse my caveat.
PLEASE ANY HELP WOULD BE WELCOMED.
 
amandaborthwick,

If I understand you properly, the sequence of events runs like this:
You sign over 100% title of a property to your ex
Then you lodge a caveat on the property because he fails to pay you a debt
Bank repossesses the property
Bank sells the property - under contract but not settled yet
Your ex declares bankruptcy

Now you want to know, "Because my ex declared bankrupty after the bank reposesed the house, what are my rights."

I think your ex declaring bankruptcy is irrelevant. You would have the same rights an any other creditor who lodges a caveat on title (as long as it was lodged and registered)

When the purchaser's solicitor goes to settle they will need to have your caveat removed before the title can be transfered into the new purchaser's name.

I am unsure of how the next step in the process works but there are some legal eagles on the forum that will know.
 
a little off topic:

Would an unsuspecting purchaser be aware of caveats on title prior to exchanging? - is a caveat listed on the title deed attached to the contract of sale? or is this something the that is found between exchange and settlement during the conveyancing?
 
I would advise you to go get in touch with a lawyer about this ASAP. The problem is that although you may very well have an equitible right to the property, the bank does in fact hold the legal title, you may very well have a fight on your hands over this.
 
is a caveat listed on the title deed attached to the contract of sale?

I suspect the answer is yes, no, maybe.

http://rgdirections.lands.nsw.gov.au/land_dealings/dealing_requirements/caveats/record_caveat_ct

A caveat is not usually recorded on the certificate of title. A request in writing to record the caveat on the certificate of title may accompany the caveat, or a Request form 11R to have a caveat recorded on the certificate of title may be lodged at any time after registration of the caveat. The certificate of title must be produced with the request.

According to the above, not normally but looks like you can also request it to be.
 
hi
first find out the trustee in banksrupsee for your ex
next go to the bank and inform them of the caveat and the reasoning behind the caveat
at the end of the day if the mortgage is higher then money recouped they are not going to worry about the issue of who gets paid as long as they do.
I would find the above before a legal as the trustee usually is very helful and could save alot of costs as they will know the issues and can give you a bit of advice
 
I am no finance expert, but if the bank holds a first mortgage over a property that it repossesses, then it will get its money first.

You MAY have a claim if there is anything left over.
Marg
 
I think the 1st mortgage holder has priority. You only have a claim to what is left over and I don't think you have any priority over other creditors. Best to see a lawyer asap.
 
Regrettably I don't think you have a caveatable interest but you will become one of many unsecured debtors- notify the Trustee in Bankruptcy. What steps did your former lawyers take to get the payment in return for the signed transfer? See some new lawyers.
 
Regrettably I don't think you have a caveatable interest but you will become one of many unsecured debtors- notify the Trustee in Bankruptcy. What steps did your former lawyers take to get the payment in return for the signed transfer? See some new lawyers.

Exactly. "Caveatable" interest in the property is generally interest that is recorded or can be recorded on the title. Somebody simply owing you money does not entitle you to the caveat. Caveator renders themselves liable for any loss or damage illegitimate caveat may cause. In that case you are even not up against your ex, you are against the bank - and if they chose - they will skin you alive. Bankruptcy Trustee of your ex - is the only point of call at the moment.
 
A caveat is simply providing notice of an interest in land.

Whether an interest exists is a question of fact but I would suggest you could make the case that the spouse in this circumstance could argue an equitable interest.
 
I think Amanda did have a caveatable interest in the property as the spouse. But, this interest was given up in exchange for the payment. So I think the question is does the interest expire if payment wasn't received?

But, even if there is an equitable interest it may not help. It may depend on how it all happened, but I suspect the bank foreclosed because he was behind in repayments. The bank would have a legal interest (as mortgagee) and this would take priority over any equitable interest.

If there were funds left over after the sale of the house Amanda may have priority on these over other creditiors - if she still had an equitable interest in the property. If not, then I think she is just one of many creditors.
 
A caveat is simply providing notice of an interest in land.

Whether an interest exists is a question of fact but I would suggest you could make the case that the spouse in this circumstance could argue an equitable interest.

Lack of education showing through. What would you say if someone lodges caveat on your property (although I doubt you have any) claiming that you caused damages to them stating on the public forum that interest in maritial estate equates to the caveatable interest in the land?

There special provisions in the statutory law against lodging illegitimate caveats, and numerous precedents in the case law stating if interest can not be recorded on the title - it is not caveatable.

There was a way for Amanda to protect her interest - not signing transfer to her ex until either money paid or until he signs second mortgage on the land (registered or non-registered) where he expressely agrees that Amanda lodges caveat. She simply was let down by someone who pretended to be knowledgeable.
 
hi
did you chat to the trustee and what did they say.
before putting a caveat on any property you do need to know what they are there for seems like alot of people don't understand them
and even when in place have not alot of idea of how to get them removed
a caveatable interest does have to be proved and it has to be an interest in that property
 
I think Amanda did have a caveatable interest in the property as the spouse. But, this interest was given up in exchange for the payment. So I think the question is does the interest expire if payment wasn't received?

But, even if there is an equitable interest it may not help. It may depend on how it all happened, but I suspect the bank foreclosed because he was behind in repayments. The bank would have a legal interest (as mortgagee) and this would take priority over any equitable interest.

If there were funds left over after the sale of the house Amanda may have priority on these over other creditiors - if she still had an equitable interest in the property. If not, then I think she is just one of many creditors.

Amanda's caveat won't defeat the bank's interest and wouldn't, in the event the sale completed, give her a right to any of the cash in any case. As you point out, she's simply an unsecured creditor as regards her (ex) husband.

By lodging the caveat she is giving notice to the prospective purchasor that she is claiming (in this case) an interest in the property, the existence of which would depend on the courts finding based on the facts.

For example, she might seek to argue that, essentially, an unpaid vendor, she has an interest by way of a trust or charge depending on the terms of the settlement, court orders and whatnot.

She needs to (a) get legal advice and (b) ensure the purchasor and mortgagee are on notice.
 
Amanda's caveat won't defeat the bank's interest and wouldn't, in the event the sale completed, give her a right to any of the cash in any case. As you point out, she's simply an unsecured creditor as regards her (ex) husband.

By lodging the caveat she is giving notice to the prospective purchasor that she is claiming (in this case) an interest in the property, the existence of which would depend on the courts finding based on the facts.

For example, she might seek to argue that, essentially, an unpaid vendor, she has an interest by way of a trust or charge depending on the terms of the settlement, court orders and whatnot.

She needs to (a) get legal advice and (b) ensure the purchasor and mortgagee are on notice.

I agree, but Amanda didn't have a caveat. It sounds like she allowed the transfer before getting the funds. So she transfered her legal interest, but probably retained her equitable interest. Or she could have argued, as you say, that the ex is acting as trustee for her share. But her share has been transferred already - so her only remedy is to sue the trustee who is now bankrupt.
 
I agree, but Amanda didn't have a caveat. It sounds like she allowed the transfer before getting the funds. So she transfered her legal interest, but probably retained her equitable interest. Or she could have argued, as you say, that the ex is acting as trustee for her share. But her share has been transferred already - so her only remedy is to sue the trustee who is now bankrupt.

According to Amanda. she lodged her caveat "prior to all this happening" which I take to mean after removing herself from the title, but prior to receiving the money (or, not, in this case), hubbies bankruptcy etc.

I suspect she could argue that her situation is analogous to an unpaid vendor and that the her equitable interest only passed to hubby subject to hubby meeting the obligations under the transfer (on the assumption of course, that her interest in the property was registered in the first instance), which he has not.

In any case, we're clearly not looking at some sort of vexatious use of a caveat here and she needs to get herself some advice based on the actual docs/agreements/orders and work from there.
 
I missed that. If she did have a caveat that is notification of her interest - but still the mortgage holder would have a higher interest and be able to take back the property as they did.
 
According to Amanda. she lodged her caveat "prior to all this happening" which I take to mean after removing herself from the title, but prior to receiving the money (or, not, in this case), hubbies bankruptcy etc.

I suspect she could argue that her situation is analogous to an unpaid vendor and that the her equitable interest only passed to hubby subject to hubby meeting the obligations under the transfer (on the assumption of course, that her interest in the property was registered in the first instance), which he has not.

In any case, we're clearly not looking at some sort of vexatious use of a caveat here and she needs to get herself some advice based on the actual docs/agreements/orders and work from there.


Shall Amanda take it as your advice that she has a legitimate caveat?
 
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