Absolute caveats and Property Seizure and Sale Orders are poorly understood by many, so here I’ll provide an overview of each.
While both can be found on the Certificate of Title and prevent instruments from being registered on the Title, there are many differences between the two.
An absolute caveat is an interest in land that is lodged to protect the caveator’s interest. Absolute caveats prevent the Registrar of Titles from registering any instruments, such as the Transfer of Land – effectively preventing the owner from transacting on the Title.
A Property Seizure and Sale Order (PSSO), on the other hand, authorises a bailiff to seize and sell property in order to pay a debt that has been proven in court. PSSOs are valid for six months from the day they’re registered on the title, and can be extended by a magistrate. PSSOs stay on the title even after they lapse, but can be removed by the land owner.
So while an absolute caveat only restricts the owner’s right to deal on the title, a PSSO actually authorises a bailiff to have the property sold.
Other differences include:
- A caveat doesn’t prove a debt. The PSSO does, as the matter has been heard in court.
- A caveat can be challenged. A PSSO can’t be challenged as the debt has been proven by the court.
- Caveats are usually removed when the caveator lodges a Withdrawal of Caveat. A PSSO can only be removed by a lodgement of a discharge, which typically happens when the debtor pays the outstanding debt into court in full.
When buying a property that is subject to a PSSO, the buyer may take responsibility for discharging the debt. This debt must be paid into the courts, and a discharge of PSSO must be registered before the Transfer can be registered.
While there are many differences between a PSSO and an absolute caveat, both must be removed before settlement can be completed.
Have ever you encountered a PSSO during a sale? Did it make for an interesting settlement? Leave a comment and share your experience.
Image by TheBusyBrain via Flickr.