A priority notice alerts interested parties who search the Register that there is an instrument or transaction pending and holds your interest in place until after settlement.
As part of the move to electronic conveyancing, priority notices were developed by the Land Registry as an additional instrument to help ensure best practice to:
- Protect the interests of buyers (particularly when transacting with an electronic Certificate of Title) by reserving priority on title for the dealing(s) identified in the Priority Notice; and
- Assist with fraud prevention by identifying a priority on title, ensuring that the scheduled transaction is not displaced by another transaction.
Any instruments lodged after the registration of a priority notice are effectively put in a queue and cannot be registered until after registration of the instruments set out in the priority notice.
Although priority notices are a simple way to temporarily preventing new legal interests in land from being registered prior to the nominated instrument or transaction they will not prevent the registration of an instrument that does not require a supporting Certificate of Title (e.g. caveats, warrants, and land tax charges).
Priority Notice v Caveat
There are two main advantages to lodging a priority notice over a purchaser caveat:
- Priority notices are cheaper to lodge than a caveat.
- There is no requirement to establish a caveatable interest in the property. If you are a party to an intended dealing you may lodge a priority notice.
A priority notice will automatically lapse on the expiration of 60 days from the date of lodgement and can be extended for one 30-day period. Importantly, the extension does not prevent unregistered instruments from the queue to be registered once the initial 60-day period has expired.
In contrast, a caveat will remain on the Title indefinitely (assuming no application by the registered proprietor to have the caveat removed).
If your property settlement will not settle prior to the 60-day period expiring you should consider lodging a caveat rather than a priority notice.
Both a priority notice and a caveat can be withdrawn prior to settlement by lodging either a withdrawal of priority notice or withdrawal of caveat.
Should I Get a Priority Notice?
It is always recommended that you lodge either a priority notice (or a purchaser caveat) to protect your interests in the property following exchange of contracts and prior to settlement.
Some lenders may require a priority notice to be lodged as part of their loan requirements. The lender will usually require your conveyancer or solicitor to lodge the priority notice and for you to pay the associated costs.
The increased level of protection that a priority notice provides can afford peace of mind to buyers in the lead up to settlement. This protection and peace of mind becomes especially important if the deposit is to be released to the Vendor prior to settlement.
Can You Afford not to Lodge a Priority Notice?
Care Conveyancing can lodge either a priority notice or a purchaser caveat on your behalf quickly and easily. Contact us now to find out which instrument best suits your needs.