I bought a property at the auction from a bank. The borrower owes the money to the bank therefore bank auctioned the property. I just realized there are some private caveats registered against the property. So, what shall I do now?
It is crucial to conduct a land search prior to purchase the property at the auction. Through land search, it will reveal the private caveats lodged.
These private caveats were lodged probably by purchaser who had earlier entered into a sale and purchase agreement to buy the property from the owner.
However, these private caveats would not jeopardize the interest and rights of the chargee (the bank) on the property. Any dealing made subsequent to the charge (made by the bank) can not defeat the indefeasible interest of the chargee.
Meanwhile, the chargee bears no duty to convey the property free from encumbrances.
Then, it is now the duty of the purchaser, to remove these private caveats in order to effect the transfers.
You have to appoint a lawyer, to act for you in the transfer of the property into your name, as well as to apply the court’s order to remove the private caveats, under S327 National Land Code.
It will take a while to obtain a Court’s order to remove these private caveats.
You have to aware the existence of private caveats prior to the purchase, and you only have 90 days (in some cases, the Proclamation of Sale allows 120 days for completion) to complete the purchase.