The Caveat and the Encroaching Wall
Carlene owns a 0.25-acre lot in Portmore, St. Catherine, with a registered title. She lists it for $18.5 million through salesman Devon. Devon obtains a copy of the certificate of title and sees a caveat lodged three weeks earlier by the neighbour, Mr. Reid. A recent survey also shows Carlene's concrete boundary wall and a small garage encroach about 1.2 metres onto Mr. Reid's registered parcel. Carlene tells Devon: The caveat is just a family dispute; the wall has been there for 20 years, so it is mine by now. A first-time buyer, Anika, asks Devon whether the title is clear and ready to transfer. Devon knows about the caveat and the encroachment but says nothing because Carlene has promised him a quick sale.
1. Explain whether the title is clear and why the caveat and the encroachment matter to a buyer.
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The title is not clear in the practical sense a buyer means. A caveat is a statutory warning on the title. Under the Registration of Titles Act, the Registrar is not expected simply to ignore a caveat and register a transfer as if it did not exist. The caveator must be dealt with: the caveat may be withdrawn, allowed to lapse, or removed by court order. Until that happens, a purchaser cannot be confident that registration will proceed smoothly, and the caveat may reveal a claimed interest that could lead to litigation.
The encroachment is a separate problem. A registered title defines boundaries, and long use does not automatically transfer ownership. Carlene may have a claim based on long possession, but 20 years of use is not a self-executing answer; it depends on the type of title, the nature of possession, and whether the true owner's rights were interrupted. More importantly for Anika, part of what she thinks she is buying may not be within Carlene's registered parcel, and the neighbour may have a claim. A buyer should not be told the title is clear when a survey shows an encroachment and a caveat is outstanding. Both are material facts that affect value, marketability, and the buyer's ability to obtain a mortgage.
2. What practical steps should be taken before any contract is signed or completion occurs?
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First, obtain the caveat itself and the neighbour's basis for it. Carlene's attorney should negotiate a withdrawal or consent, or apply to the court if the caveat is unjustified. Second, commission a boundary survey and have the surveyor identify exactly what is enclosed by the wall and garage compared with the registered parcel. If there is an encroachment, the parties may need a boundary agreement, a transfer or lease of the affected strip, or removal of the structure, depending on what the neighbour will accept.
Third, the contract should not be unconditional. It should be conditional on the caveat being removed or satisfactorily resolved and on the encroachment being regularized before completion, with a clear deadline. The deposit should be held by a stakeholder, not released early. The buyer's attorney should search the title again immediately before completion and confirm that the transfer can be registered without the caveat. The salesman should keep a written record of what was disclosed and when. If the seller refuses to allow investigation or disclosure, Devon should decline the listing or withdraw, because marketing a title with a known unresolved caveat and encroachment as clear would expose him and his dealer to serious disciplinary and civil risk.