Questions about caveats

[super_sam]

A caveat can be used to recover legal costs as long as long as permission was granted to do so.

If a caveat has been lodged without your permission you can have it removed. Your solicitor would have to read anything and everything you have signed or put in writing very closely though as it can be costly if you attempt unsucessfully.

 

[the helix]

I still think she could have a caveatable interest as the funds were not just a loan, but she helped with the improvement of the property. This would give her an equitable interest in the property.

Correct.

The sister has contributed to a Constructive Trust, thereby entitling her to an equitable interest in the land.

 

[brianjones123]

Caveat lodged

Correct.

The sister has contributed to a Constructive Trust, thereby entitling her to an equitable interest in the land.

Well...my fears have come true. My sister has lodged a caveat on the basis of a constructive trust. I dont know how she can be allowed to do this when I own the house in my name and Im the sole mortgagee. I cant fight legal disputes, Ill have to let the bank sell the house. The nature of the interest is a "cestui que trust". There is no dollar value claim being made. Im gutted by this.

 

[Perp]

Well...my fears have come true. My sister has lodged a caveat on the basis of a constructive trust.

I'm sorry to hear that.

I dont know how she can be allowed to do this when I own the house in my name and Im the sole mortgagee.

I suggest you study up on what a constructive trust is; the names on documents are irrelevant with regards to a constructive trust. A constructive trust is created precisely because somebody who has an equitable interest is concerned that their interest is not legally protected. A constructive trust provides legal recognition of their interest in the property, and I assume she was able to create it as a consequence of the improvements to your home.

If I may ask again:

1) Would your sister agree to remove the caveat or withdraw the constructive trust arrangement, if you give some enforcable undertaking, and an agreement to pay her some amount within, say, 7 days of settlement?

2) How do you go from having a sister who - unasked and without compensation - spends $40K on improving your house, to things breaking down to a point where she's contemplating legal action against you? Seriously, if we are able to try and see things from your sister's perspective as well as your own, we may be able to make some suggestions for resolving this without the involvement of the legal system (which, trust me, will be better for both of you).

 

[brianjones123]

I suppose she may agree to lift the caveat if I agree to some sort of undertaking. She is very stubborn and may wish to just leave the caveat on to spite me.

How I go from a sister willing to help me renovate a house to a sister that want to take me to court is beyond belief. She doesnt trust me and wants to protect her interest in the property. At the same time she doesnt care if the bank sells the place. She is very unreasonable.

I would have thought if it does go to court, the question would arise as to why she didnt choose to protect her interests sooner. Its 5 years since the house was bought

 

[Terryw]

I would have thought if it does go to court, the question would arise as to why she didnt choose to protect her interests sooner. Its 5 years since the house was bought

That would not really matter. Many people have an interest which they haven't protected for a variety of reasons. Many only lodge caveats when negotiations have broken down.

I think your best option is to be nice and start negotiating with her.

 

[the helix]

Many only lodge caveats when negotiations have broken down.

Or.. when they believe the interest they are seeking to protect with the caveat is about to be disposed of.

I think your best option is to be nice and start negotiating with her.

The other option is to call her bluff. (do so after seriously considering the consequences) I'm not too familiar with the Tasmanian legislation, but in Queensland a caveatee is able to serve notice upon the caveator, directing that they commence proceedings in a court of competent jurisdiction within 14 days. If the Caveator does not start proceedings, the Caveat will lapse.

Have a read of the Tasmanian legislation.. more specifically sections 133-137 of your Land Titles Act (1980) TAS. If you seriously believe you have options under this legislation, seek legal advice as to how to pursue them.

I agree with Terryw. I believe your first priority should be to resolve the issue with your sister... before she hauls you into a lengthy and expensive court proceeding.

 

[wylie]

My sister helped me with renovating my home just after purchase and spent some $40K in costs on the house. I never asked her to do this and I never agreed to pay it back.

This sounds strange to me. There must have been SOME discussion about the money she decided to spend, her reasons for doing it, and her expectations for being repaid (or not). Surely.

I bought the house in my name and I took out the mortgage in my name soley.

After a fall-out, she is now threatening to place a caveat on my house and wants to stop me from making a sale.

I would assume that the $40K she put into your house has improved its value by $40K. I know that is not always the case, but would you say that is the case in this situation?

Why not negotiate with your sister, and pay her the $40K right now to clear this up once and for all. Unless you were not aware that she had spent this amount, you must have approved of what she did back then, even if there has been a falling out now.

Believe me, there are "issues" in my family, so I am aware how difficult this can become. In my opinion, whether it heals the rift or not, you should repay the $40K and clear the slate with your sister, have her remove the caveat in exchange for the repayment, and move forward.

 

[brianjones123]

Thanks all for the advice and feedback. it has been very useful. I am meeting my lawyer and I feel I will make an offer to repay someof what was put into the renovation, if not all.

She may be bluffing but I am not a person that wants to keep what is not mine. Even though she has turned nasty, I believe that karma will get me if I dont do the right thing here.

 

[mr_milkman]

A caveat can be used to recover legal costs as long as long as permission was granted to do so.

If a caveat has been lodged without your permission you can have it removed. Your solicitor would have to read anything and everything you have signed or put in writing very closely though as it can be costly if you attempt unsucessfully.

Damn. I fear I unwittingly gave permission to do so. As I was completely clueless to what I was signing at the time and also under EXTREME duress. It wasn't explained to me what I was signing and was less than 30mins until a court appearance when the contract was presented to me. The solicitor refused to represent me if I didn't sign and also refused to allow me to seek external legal advice regarding the contract. It ended up being a contract giving the solicitor permission to place a caveat on my property for a continuing amount of money. I'd love to see another solicitor about this, but I am broke now and can't afford it... guess I have to loose my home and be out on the street.