What is the purpose of a caveat?

A caveat serves as a formal notice to the public that someone claims an interest in a specific piece of land or property. It acts as a safeguard, ensuring that potential buyers or other interested parties are aware of this claim before proceeding with actions related to the property. This means that anyone who looks at the title of the property can see that there is a caveat and understand that there may be a legal issue or claim that needs to be resolved.

For instance, if someone has a caveat on a property, they may have a legal right to it due to various reasons such as an unpaid mortgage, a lease agreement, or a family relationship. Thus, the caveat protects the interests of the claimant by alerting buyers and investors to the existing claim, which can influence their decision-making process.

Understanding the function of a caveat is crucial in real estate transactions, as it ensures that all parties are aware of existing claims before any transfer of ownership occurs, facilitating transparency and reducing the chance of future disputes.