CAVEAT SYSTEM

DEFINITION
 A caveat serves a notice to the world
warning any person intending to deal with
the caveat land that there is a prior claim
affecting the property

 Caveat is a statutory injunction to keep the

property in status quo (no change) until
court has made a decision what are the
rights of the parties involved
 PARTIES INVOLVED
 Caveator = person who lodges
the caveat

 Cavetee = the owner of the

land / property
 TYPE OF CAVEAT
 Private Caveat
 Protecting the interest of a person who
claims to have interest in the said land
 Eg: tanah pusaka
 Usage:
 Purchase of a property where down
payment has been made
 Bank paid redemption sum to another

lender to redeem the title

 Loan granted under Loan Agreement cum

Assignment (property without title)

 TYPE OF CAVEAT
 Private Caveat
 Need to be lodged with the respective land office
using Form 19B
 Prevent any future dealing on a particular
land/property or freeze the position temprorarily

 The caveator does not possess the documents of

title
 Life span of the caveat is 6 years which shall be
automatically lapsed
 Withdrawal of private caveat by caveator
 Removal of private caveat by Registrar or Court
.
Lien holder caveat

 A statutory interest which is more powerful

compared to private caveat

 It operates as a form of security

 Renders a lien a secured debt

 The titles in the bank’s (caveator) possession for

safe keeping

 It is not a charge
Lien holder caveat

 Features
 Application using Form 19D
 For short period of time
 Extend to reputable, valuable and
creditworthinness customer
 No ad valorem stamp duty
 Borrower does not want any encumbrance to be
endorsed on the land title. (the title is clean
without the name of the bank registered on the
land title)
 The caveat lifespan is permanent
 In the event of default, the bank can foreclose the
land and the sales proceed to settle the debt

 Withdrawal and cancellation are by

 Lien holder caveator
 When the land has been sold off to pay off the loan
 When the debt has been fully settled and caveat
accordingly removed
 Court order
 Advantages and disadvantages of lien
holder caveat

Refer text-book

 Comparison between a legal charge and a lien-

holder caveat

 Refer text-book
THE END