Private Caveat

Private Caveat is lodged by a private person or company who claims a valid legal or equitable interest in the land and to protect their financial or legal claim to a property the examples of are house, shop or land.

The main purpose of Private Caveat is used to freeze a property's status quo during a private dispute, such as an ongoing sale and purchase agreement or a loan disagreement etc.

To enter private caveat, one must have caveatable interest over the property.

The examples of caveatable interests (the examples listed herein are not exhaustive) :-

1. A valid Sale & Purchase Agreement in which Purchaser may lodge private caveat after deposit has been paid and pending the registration of title in favour of purchaser ;

2. To claim for deposit paid after Sale & Purchase Agreement which had been legally terminated ;

3. An option to purchase contained in a validly concluded binding contract ;

4. A claim to a registrable interest in land in respect of a house which the claimant had built and in which he had been living rent free and uninhibited for a substantial period of time ;

5. The interest of a beneficiary who succeeded in obtaining the letter of administration who sought to challenge the validity of a transfer of a property.

The frequently-encountered questions :-

1. the property’s owner in fact borrowed money from lander and the lender entered sale & purchase agreement with borrower thereafter to secure his purported loan, whether the lender has caveatable interest over property ?

The lender has no caveatable interest to lodge private caveat on the property in question as the sale & purchase agreement is only a sham to camouflage the illegal money transaction (Mahmood Ooyub v Li Chee Loong & other [2020] 6 MLJ 755) (Pannir Selvam a/l Sinnaiyah & anor v Tan Chia Foo & Ors [2021] 7 MLJ 384).

2. Whether property owner is entitled to lodge private caveat ?

The property’s owner may not enter private caveat over his property since a person who relies on his status as registered owner must necessarily be a person already possessing title in the land unless he can go further and establish some set of circumstances giving rise to a distinct interest in the property distinguishable from that which he holds as registered proprietor such as the illegal money lending transaction was used as sham to enter sale and purchase agreement.

3. Whether the tenant is entitled lodge private caveat to protect the tenancy entered with the landlord ?

The tenant exempt from registration in the land office is not entitled to enter private caveat over the property as opposed to lease which is registered and endorsed on the register document of title

4. Whether a beneficiary can enter private caveat to protect his right over the property as specified in the will where the testator is still survived ?

A beneficiary is not entitled to lodge caveat over the property to which he is the beneficiary if the testator is still survived or the circumstances under which the estate of the deceased is not fully administered.