In Malaysia, you cannot simply “freeze” someone's property by lodging a caveat because you are owed money or have a personal dispute. Under the National Land Code (NLC), a caveat is a powerful tool used to protect your property rights, but you must prove you have a "caveatable interest." This means your claim must be a recognized interest in the land or property title itself. You are generally allowed to lodge a private caveat if you have a legal or equitable interest in the land/ property that is capable of being registered.
Purchasers with a signed SPA: You have signed a valid Sale and Purchase Agreement (SPA) to buy a property and have paid the earnest deposit. The caveat acts as a lock to prevent the owner from selling the property to a second party while you await the transfer of title.
Beneficiaries of a Trust: You are the beneficiary of a property held in trust (i.e., the property is registered in a trustee's name, but legally belongs to you). The caveat protects your beneficial ownership.
Unregistered Chargees (Banks/Lenders): You have provided a loan that is secured by the property, and the charge (mortgage) documents are signed but not yet formally registered at the Land Office.
Holders of an Option to Purchase: You possess a legally binding option to purchase the property (a contract granting you the exclusive right to buy). Lodging a caveat protects this contractual right.
The Risk of Wrongful Entry If you lodge a caveat without a valid reason (no caveatable interest), the property owner can apply to the court to remove it. More importantly, under Section 329 of the National Land Code, the court can order you to pay compensation (damages) to the property owner for any financial loss they suffered (e.g., if the caveat caused a sale to fall through).
Malaysia
