In Victoria, a commercial property transaction involves a caveat lodged by a third party claiming an equitable interest. What is the most appropriate immediate action for the purchaser's solicitor?
Correct Answer
B) Investigate the basis of the caveat and seek its removal if the claim is unfounded.
A caveat prevents registration of dealings and must be addressed before settlement can proceed. The solicitor should investigate the legitimacy of the claimed interest and take steps to have it removed if it's without proper basis, potentially through lapsing notice procedures under the Transfer of Land Act.
Why This Is the Correct Answer
Under the Transfer of Land Act 1958, a caveat stops registration of dealings that conflict with the interest claimed, so it must be dealt with before settlement. The purchaser's solicitor should investigate the claim and, if it is unfounded, press for its withdrawal or removal, for example through the lapsing notice procedure in section 89A or a court application.
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