Home Real Estate Caveat or Caution: Do I Need One?

Caveat or Caution: Do I Need One?

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The word Caveat means warning or proviso (something said as a warning, caution, or qualification). The lodging of a caveat over a property is a way of telling anyone who wants to deal with the property to be aware of the fact that someone else’s interest already has priority.

A purpose of a caveat may be to allow time for parties to apply to the court to enforce or determine interest in land. Alternatively, the purpose may be to alert a third party as to the interest claimed.

On the other hand, a Caution is a notice in the form of a register to the effect that no action of a specified nature in relation to the land in respect of which the notice has been entered may be taken without first informing the person who gave the notice.

Who may lodge a caveat?

There are a number of persons who may lodge a caveat, including a person claiming an interest in a lot to be transferred or a person who has the benefit of an order of a Kenyan court restraining the registered proprietor from dealing with the Property/Lot.

Any person who is claiming a contractual or other right over land amounting to a defined interest capable of creation by a registrable instrument, e.g. a lease, may lodge a caution with the Registrar against any dealing which is inconsistent with his interest.

The entry of a transaction, with respect to such land, may not then be made unless the cautioner has received notice. Lodging of a caveat or caution without reasonable cause can lead to a remedy in damages.

What are the grounds to claim an interest in a property?

In order to establish that you have a caveatable interest over the property, a caveator needs to show that they have sufficient interest over the property.

For example, this may be in the form of an equitable mortgage (for example, when a parties’ relationship breaks down). Or that they are the buyer of the property where settlement is not to be effected for some time or where proceedings are on foot and the registered owner is attempting to sell the property.

HOW DOES ONE PLACE AND REMOVE A CAVEAT OR CAUTION?

a) Notice and effect of Caution

The registrar shall give notice in writing of a caution to the proprietor whose land, lease or charge is affected. So long as the caution remains registered, no disposition which is inconsistent with it shall be registered, except with the consent of the cautioner or by order of the court.

b) Withdrawal/removal of the Caution

i. A caution can be removed by the person lodging the same, or by order or the court, or by the Registrar, if such person fails to remove it after being served with a notice to do so by the Registrar.

ii. The registrar may, on the application of another person interested, serve notice on the cautioner warning him that his caution will be removed at the expiration of the time stated in the notice. If at the expiration of the time stated the cautioner has not objected, the registrar may remove the caution.

c) Second Caution in respect to the same matter

The registrar may refuse to accept a further caution by the same person or anyone on his behalf in relation to the same matter as a previous caution.

d) Wrongful Caution

Any person who lodges or maintains a caution wrongfully and without reasonable cause shall be liable, in action for damage at the suit of any person who has sustained damage, to pay compensation to such person.

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