SA Caveat from Short Term Loan - Legal Without Consent?

[Ali1978]

Hi, my husband and I have been separated for 3 years. I am retaining our home and we had an agreement that after 12 months of me working full time, I would refinance and pay him an agreed amount. We have around 40% equity.

I have begun the refinancing process, which has basically been approved, but there is a caveat on the title. This was, from what I can gather, a short term finance company that my husband put on around 18 months ago to borrower a sum of money - neither myself, nor my conveyancer has had any luck finding out the amount with the company in Sydney. I knew nothing of this loan and I received none of the funds.

Is this legal? Can he borrower money against the home without my knowledge or consent? I cannot refinance now nor give him the money he is owed from the equity nor pay the caveat out.

I should add that I have paid the home loan, rates etc. 100% myself for the last 3 years.

 

[John84]

I assume your both on title to the home. I suspect that any caveat only secures against his interest in the property. It's probably academic however as what you should do is pay out the caveat and deduct it from what you agreed to pay your husband

 

[Colin123]

It sounds unusual. Unless you aren’t on title - a caveat lender would usually secure their loan with agreement from both title owners. They simply couldn’t exercise their right to foreclose in the event of default. Hmm ... I think more investigation is required. Have you discussed with your ex-husband? Caveat lenders can be quite expensive, plus usually, they get an authority to lodge 2nd mortgage at the time of caveat.

 

[Colin123]

One last thing - did your husband run a business? Usually caveat lenders are only for business purposes. I’ve seen some nasty situations with caveats over the years. Prior to GFC we saw these loans set up leaving grandparents losing their home, or amounting huge fees. My opinion as a starting point- speak to your husband to find what the caveat was for?