Purchasers who rescind must remember their caveats

2 December, 2010

LPLC has advocated in the past that practitioners acting for purchasers should lodge a caveat for their clients as soon as practicable.

Many practitioners tell us that they do so as a matter of course unless the client elects not to.

Practitioners need to remember to remove the caveat in the event that the purchaser elects to end the contract after serving a rescission or default notice. While the purchaser may have a claim or entitlement against the vendor for the return of the deposit that constitutes a charge on the land sufficient to support a caveat¹, the entitlement claimed in the original caveat as purchaser no longer exists and the original caveat needs to be removed.

¹ See clause 28.3(b) of the standard form contract prescribed by the Estate Agents (Contracts) Regulations 2008.