A buyer made an offer on a residential property and registered a buyer's caveat on the title to protect their interest. Subsequently, the seller received a higher offer and tried to transfer the property to the new buyer. What is the immediate effect of the registered caveat?

Question: A buyer made an offer on a residential property and registered a buyer's caveat on the title to protect their interest. Subsequently, the seller received a higher offer and tried to transfer the property to the new buyer. What is the immediate effect of the registered caveat?

Answer options: ✅ It prevents the registration of any subsequent transfer of the fee simple interest without the caveator's consent or a court order.

• It automatically cancels the original offer and allows the seller to proceed with the new offer.
• It entitles the registered buyer to immediate possession of the property.
• It forces the seller to sell the property to the caveator at the original offer price.

Correct answer: It prevents the registration of any subsequent transfer of the fee simple interest without the caveator's consent or a court order.

Explanation: A registered caveat under the Land Titles Act (Alberta) acts as a warning on title, preventing the registration of any subsequent dealings, including a transfer of the fee simple, until the caveat is dealt with by consent of the caveator, settlement, or court order. It protects the caveator's claimed interest.