Glossary
Caveat
A legal notice lodged on a property title to protect a party's interest or claim. Private caveats are commonly used by buyers during property transactions to prevent the seller from disposing of the property before completion.
In Detail
In Malaysia, a caveat (Kaveat in Malay) is a warning registered on the property title at the land office to prevent dealings that might affect the caveator's interest. There are two main types: Private Caveat, lodged by a buyer after signing the SPA to ensure the seller cannot sell to another party or create additional encumbrances before the transaction completes; and Solicitor's Caveat, lodged by a buyer's lawyer when funds have been disbursed to protect the buyer's interest until transfer is completed. A caveat does not confer ownership — it simply 'freezes' the title, preventing registration of new dealings without the caveator's consent. Once the sale is completed and the property is transferred to the buyer's name, the original caveat is typically removed. Caveats remain on the title until formally withdrawn or removed by court order. Always check for existing caveats on a property title search before making an offer — multiple caveats can signal legal disputes or unresolved claims.
Investment Impact
Lodging a private caveat is a standard risk-mitigation step in property transactions and costs around RM200–300. It protects you from seller misconduct and ensures your SPA claim is publicly registered. However, if you're buying a property with existing caveats, proceed with caution — it may indicate the seller has multiple debts, ongoing legal disputes, or has sold the same property to multiple buyers. Require the seller to remove all third-party caveats before proceeding with the transaction, or insist on a solicitor's undertaking to discharge them upon completion.