Introduction
A caveat is an obstacle that any person with interest in a property can lodge in a land office. The person who lodge the caveat over a property is call "Caveator", and the person whose's property has been caveat is call "Caveatee".
The effect to the lodging of caveat is that the property cannot be transfer to another third party unless it is being removed.
Four (4) ways to remove a caveat
First method apply to the person who lodge the caveat. The caveator can withdraw the caveat lodged himself. The withdrawal of caveat can be done via Form 19G under section 325 of the National Land Code (NLC).
The second method to remove a caveat is to apply to the registrar of land office to get the registrar to remove the caveat lodged. The applicant has to file a Form 19H under section 326 of the NLC.
The third way to remove a caveat is by way of applying for a court order under section 327 of the NLC. The Court would look into the caveatable interest of the Caveator. If there is no more basis for the caveator to lodge the caveat, the court may grant the order to remove the caveat.
The fourth way is to wait for the caveat lodged to lapse by itself. The caveat can be removed on the property by itself after expiry of two (2) months of it being lodged.
Case study 1: Removal of caveat on property via Court Order
In the case of Bluefire Development Sdn Bhd v Tan Han Kwan (2015), High Court, the case is about the Plaintiff (land owner) suing the Developer for lodging private caveat.
The developer has lodged a private caveat in form 19B under section 323 on the grounds:
- there is a legal proceeding brought against the Plaintiff;
- as security for the trial of the proceeding.
The Plaintiff challenged that the Defendant doesn't have a caveatable interest on the Plaintiff land. The Defendant is also one of the shareholders within the Plaintiff. If you want to lodge a caveat, you must have a caveatable interest. The definition of interest is defined under s340 of the National Land Code.
Even though the Defendant is not the registered proprietor of the land, the investment of the land falls under category 3: caveatable interest which are the unregistered interest capable of protection by the entry of a private caveat. The Defendant interest in his investment in the land is an unregistered interest protected under s340.
The issue was whether the private caveat should be extended. It was held that the private caveat will be extended as the Plaintiff has yet to carry out any application for loan facilities from the relevant financial institutions to carry out the alleged work. The status quo of the land should be preserved to protect the interests of the Defendant as one of the initial shares of the Plaintiff.
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