VIC Caveat - Can We be Forced to Sell Our House?

[Fambam5]

Hi,

I'd like to find out if anyone can please help? Can a caveator who placed a caveat with interest in our property forced us to sell our house in order to get their money back in full? Due to domestic living dispute with a family member (retired) who helped us purchase our first house with his help he “lent” us the deposit and verbally my husband, I agreed to repay him back in 4-5years time. Nothing drawn in writing at the time, but I’m learning from this!

He lives with us as he’s retired and single. He’s got no mortgage and on the pension. So he’s demanded we sell the house (after only owning it 1 year of purchase) and demands we sell the house so he can pay back his deposit money. Don’t think he can just force us to sell our house as he’s not on the title and only hubby and I are joint tenants on this mortgage. Any help would be much appreciated.

 

[Rod]

A caveat does nothing except stop a sale of a property, and/or notify the person the person who has the caveat that a 'dealing' may occur on the property.

A verbal contract is enforceable, so if there is a 4-5 year loan period and only one year has elapsed then he's going to need to prove a debt in court before you need to do anything. Keep saving for the loan repayment to him and pay him as per your original agreement.

If you still need assistance post back here and I can give you a link to email your details to me and I can have one of our property lawyers call you. Might be needed if you want peace of mind.

 

[Fambam5]

Hi Rod, thanks for the info. We told my dad we have the right to defend our property and there’s no way we are selling our brand new house after a year so he can take us to court if he wants and if we have no hidden agendas from our side of things and I don’t think he’ll win just to try get all his money back. Please send through the link where I can get more information as per your advice. Cheers

 

[Rod]

Hi Fambam,

Go to www.vichelp.com.au to find my email address.

 

[Tim W]

Can a caveator who placed a caveat with interest in our property forced us to sell our house in order to get their money back in full?

Compulsorily?
Almost certainly not.
For one thing, you could (at least in theory) pay him out in cash.


I am slow to use the term "caveat" for what you have done here.
In order for there to be a caveat on the property, he needs to have what the law calls a "caveatable interest".
He may or may not have one, depending on the structure of the deal.

Bear in mind also that he and/or you may have used the term incorrectly as you were setting things up.
Caveats don't, of themselves, create charges over land.
People often get this wrong. I blame American TV.

Depending on how you set it up, he might have a security interest (for example, as a mortgagee), or
he might have an equitable interest (such as if the loan secured by some other form of interest in the property,
such as a share of any proceeds of a future sale), or
he might have a part share of the property itself (as say, a tenant in common), or
he might simply be somebody to whom you personally owe an unsecured however-many thousand dollars.

What you do next depends on the nature of the agreement.

If you want to know if there is, in fact, a caveat on the property, do a title search (or have your lawyer do it).