Thank you for your application for funding with JustFund.  Please be aware of the following details regarding caveats that we place on property assets as part of our funding agreement.

 

What is a Caveat? 

A caveat is a formal notice that someone has an interest in a property. When a third-party lender gives a loan to someone using a property as security, they often want to ensure that there are no prior claims or interests on that property which could jeopardize their ability to recover their money if the borrower is unable to repay a loan as agreed with the lender.  If a caveat is registered over a property, a formal notice will be posted to the address, with the details of who lodged the caveat. The title of the property will also be electronically updated to show the details of the caveat that has been lodged. When a caveat is removed, the title is updated again to erase the lodgement. 

Registering caveats over property is a common part of JustFund’s lending. As part of JustFund’s Funding Agreement, you assign JustFund an interest in your property, only to the extent of the amount of funding that is owed to JustFund by you at any given time. We will confirm at the time of approval if we intend to ask your consent for us to register a caveat over your property as part of our Funding Agreement with you. 

 

Why would JustFund Register a Caveat Over my Property? 

Generally speaking, if someone borrows money and uses their property as collateral (security) for that loan, a lender often wants to make sure there are no other claims or debts associated with that property that could take precedence over their claim. By registering a caveat on the property, the lender notifies the world that they have a financial interest in it. This protects the lender by ensuring that if a borrower defaults on their loan, the lender has a legal right to sell the property to recover their money before any other creditors or claimants.

In the context of family law matters, having a caveat over a property will alert JustFund if an owner of the property attempts to sell or dispose of it without notice or consent. This is an important factor of JustFund’s funding solution, because it acts to preserve the assets you are negotiating over with your former partner, as well as the likely source of repayment of the loan. 

Essentially, a caveat acts as a preemptive measure to secure JustFund’s financial interest in property, making it easier for us to lend money when an ordinary lender would deem the risk too high. A caveat provides reassurance and protection to JustFund that our loan is backed by an asset. JustFund may also need to take a caveat if your law firm does not operate a client trust account.

 

How Does a Caveat Impact Me? 

When a caveat is lodged over your property, it will mean that no one is able to sell or deal with the property without notice to the caveator. For JustFund, this means that a title holder is not able to dispose of an important asset in your property pool in a way that would diminish the property settlement available to you, or the best source of repayment of JustFund’s loan. 

If a borrower ever defaults on the terms of a loan, a caveat also grants a right to the lender to enforce the agreement made with the borrower. That includes the legal right to approach a Court and seek the sale of a property in order to recoup the debt.  JustFund prides itself on the close relationship we maintain with you during the term of your Funding Agreement. 

We are here to help you pursue your just and equitable legal entitlement. The best way to help us do that and to help your matter move forward smoothly is to keep us up to date on your progress and plans. 

 

When will JustFund Remove the Caveat? 

JustFund will remove any Caveat secured over your property:

1. Once your Line of Credit has been repaid in full; or 
2. Simultaneously to the sale of the property where JustFund has been given prior notice, and is aware of and has agreed to where any sale proceeds will be held or applied; or 
3. In negotiation with your lawyer if deemed necessary to allow you to meaningfully progress your family law matter; or 
4. If Ordered by a Court to remove the caveat.  

 If you have still have questions or concerns regarding caveat’s please contact our support team on 1300 644 980 or email us at clients@justfund.com.au