A buyer, David, has entered into a Contract of Purchase and Sale for a vacant lot in Tofino. David's lawyer discovers a 'caveat' registered on the title by a neighbouring property owner, claiming an unregistered right-of-way across David's prospective lot. What is the immediate implication of this caveat for David's purchase?

Question: A buyer, David, has entered into a Contract of Purchase and Sale for a vacant lot in Tofino. David's lawyer discovers a 'caveat' registered on the title by a neighbouring property owner, claiming an unregistered right-of-way across David's prospective lot. What is the immediate implication of this caveat for David's purchase?

Answer options:

• The caveat immediately voids David's Contract of Purchase and Sale. ✅ The caveat prevents the registration of any further instruments, including David's transfer of ownership, until the claim is resolved.
• The neighbouring owner must prove their claim in court before the sale can proceed.
• David's lawyer can easily have the caveat removed by notifying the Land Title Office.

Correct answer: The caveat prevents the registration of any further instruments, including David's transfer of ownership, until the claim is resolved.

Explanation: A caveat registered on title under the Land Title Act acts as a warning or notice that someone is claiming an interest in the land. It typically prevents the registration of other instruments, such as a transfer of ownership, until the issue it raises is addressed or the caveat is withdrawn/removed.