A buyer entered into a purchase contract for a property. During a review of the Certificate of Title, their lawyer discovered a caveat registered by the seller's ex-spouse, claiming an interest in the matrimonial home. The seller insists the claim is invalid. What is the most appropriate next step for the buyer's lawyer?

Question: A buyer entered into a purchase contract for a property. During a review of the Certificate of Title, their lawyer discovered a caveat registered by the seller's ex-spouse, claiming an interest in the matrimonial home. The seller insists the claim is invalid. What is the most appropriate next step for the buyer's lawyer?

Answer options: ✅ Advise the buyer not to proceed with the purchase until the caveat is discharged or otherwise removed from title.

• Tell the buyer to ignore the caveat, as it is likely a personal dispute between the seller and ex-spouse.
• Suggest the buyer registers their own caveat, which will take priority over the ex-spouse's caveat.
• Recommend the buyer negotiate a lower purchase price to compensate for the caveat.

Correct answer: Advise the buyer not to proceed with the purchase until the caveat is discharged or otherwise removed from title.

Explanation: A registered caveat indicates an outstanding claim against the property, which can prevent the transfer of clear title. The buyer's lawyer would prudently advise halting the transaction until the caveat is either officially discharged by the caveator or removed by court order, ensuring the buyer receives unencumbered title as per the purchase contract.