A Caveat is a notice that a person can give to the registrar of titles. It will generally stop anyone else registering any interest on a title to land.
So why would someone want to stop another person from registering an interest on a title. Let me tell you about a case that I was involved with, it illustrates better than any explanation why caveats are so important.
About 10 years ago I acted for a farmer. He lived on his Macadamia nut farm with his wife. He had been given the farm by his father.
His daughter had found herself in some trouble and decided that she needed money. In order to get that money she went to a private lender. As you know lenders don't lend money unless they receive a mortgage in return. The mortgage is their assurance that they will be paid. A mortgage is a right given to a lender to sell a property to pay a loan. The daughter had no house to mortgage.
What could she do?