unsecured personal loan, now a caveat?

[salt]

Hi all.
I've been reading these forums a lot recently and have found them very helpful! I'm hoping that perhaps some of you may be able to help me with this question of mine.

I have an unsecured personal loan and home-loan with a credit union in Tasmania. For various reasons I couldn't keep up with the personal loan, though I did keep up with the mortgage repayments. To cut a long story short they placed a caveat on my property. From my understanding of caveats they can only be placed if the party has an interest in the property or to recover legal costs? Can they be placed to recover an unsecured personal loan?

 

[Pa1nter]

I thought unsecured means unsecured?

If your mortgage is with the same bank,they already would have the deed?

Now they place a caveat in case you refinance with another bank and pay the mortgage out,
They have you either way

 

[joycenmat]

Hey Painter Man!

Does a caveat affect your credit rating?

What is a caveat in lay mans terms? And when are they applied?

Is it holding something and preventing you from doing something>

J

 

[Shaneelastic]

unsecured means it is not secured by a mortgage againts shares, property motor vehicle etc.

unsecured loans can still be forced into bankruptcy. Banks will love that you have a property.

i think the bank has done the right thing.If a debtor of mine was not paying, id be lodging a caveat too if they refused to pay

 

[Rolf Latham]

Hi Joyce

A caveat prevents further dealings with the property.

It does not affect the first mortgage, bit of overkill in this instance if the CU already holds the first mortgage

Id hazard a guess the unsecured loan has an all monies clause to bot.

ta
rolf

 

[salt]

unsecured means it is not secured by a mortgage againts shares, property motor vehicle etc.

unsecured loans can still be forced into bankruptcy. Banks will love that you have a property.

i think the bank has done the right thing.If a debtor of mine was not paying, id be lodging a caveat too if they refused to pay

I'm not asking if the credit union has done the "right thing" I understand the reasoning behind it, they want to ensure their money back (even though I have paid half the loan off, but they put the caveat for the full loan amount plus an extra $500). I'm trying to find out if they were legally entitled to place the caveat as the loan was unsecured and I thought that when a caveat is placed on a property the reason has to be related to the property normally. As I've read in Tasmania if I apply to have it removed and it's proven that it was wrongly placed they would have to pay damages.

 

[salt]

Hi Joyce

A caveat prevents further dealings with the property.

It does not affect the first mortgage, bit of overkill in this instance if the CU already holds the first mortgage

Id hazard a guess the unsecured loan has an all monies clause to bot.

ta
rolf

hey rolf, what's an "all monies clause" exactly?
thanks

 

[Kristine..]

I'm not asking if the credit union has done the "right thing" I understand the reasoning behind it, they want to ensure their money back (even though I have paid half the loan off, but they put the caveat for the full loan amount plus an extra $500). I'm trying to find out if they were legally entitled to place the caveat as the loan was unsecured and I thought that when a caveat is placed on a property the reason has to be related to the property normally. As I've read in Tasmania if I apply to have it removed and it's proven that it was wrongly placed they would have to pay damages.

Hi Salt

Sorry to hear that you find yourself in an uncomfortable situation

Yes, anyone with a 'good reason' can place a caveat over your property.

Some years ago when No: 1 Son bought a property, settlement was delayed as the Vendor's Conveyancer had overlooked including the caveator in the settlement adjustments.

In this case, it was Legal Aid and the Vendor had owed them about $1,000 for some years. The amount did not have to be repaid until she was in a position to do so - but Legal Aid would not release the caveat until the bill had been satisfied.

I think it would be drawing a long bow if the local video store put a caveat on your property for unpaid fees, but the plumber could certainly do so!

I have had situations where a disaffected spouse has lodged a caveat over their partner's property simply as a precaution so that they would know if there was any attempt to deal with the property, whether selling or mortgaging the property.

It is certainly effective, no lender will proceed with an application if a title search shows the presence of a caveat.

The 'all monies' clause is a lot more effective than cross collateralisation of properties.

Any credit facility you have with that lender is tied in with all the credit facilities you have with that lender - so if you are behind with the Credit Card you are deemed to be in arrears with all your facilities and the lender can do whatever it takes to recover their money.

As with 'Caveat Emptor' - let the buyer 'be aware', a 'caveat' means that the caveator has to be 'heard' that is, give permission to any dealings with the property.

A caveator cannot force a sale, but they can certainly stop a sale. It is, in effect, an injunction against further action.


Hope it all turns out well for you

Regards
Kristine

 

[jrc]

Because the laws are different in each state and each lender will have slightly different documents, you need to look at the specific Tasmanian laws and the exact wording of your documents.

Why don't you just talk to your credit union and ask them why they could lodge a caveat on what you thought was an unsecured personal loan?

 

[Pa1nter]

I think it would be drawing a long bow if the local video store put a caveat on your property for unpaid fees, but the plumber could certainly do so!

That is a good post,very well described,
I have a question for you,
I have a customer that I did painting works for and to this day they have not paid.
It is only for around $800,it was a new house just being built,
Would it be feasible to place a caveat on their property for possible payment in the future?
I don't want to be petty,just don't like the way they did it.
Money is not that important,just the principle of the matter.

 

[Terryw]

In NSW caveats can only be lodged in limited circumstances - only if you have an interest in the property. An interest could arise in a number of situations such as family law, trusts, unregistered mortgages, exchanged contracts before settlement etc.

You generally cannot lodge a caveat on someone's property if they just owe you money. But, many loan agreements are structured so that you may be giving them an interest in the property which will enable a caveat if you do not pay.

This is the same in Tasmania, I beleive.

Maybe you should read the loan agreement for the personal loan and see if there is anything like this in there.