Company Title

 Company Title

Company title pre-dates the introduction of strata title in 1961. Since this time, many buildings have chosen to change to strata title and as a result company title buildings are becoming less common. There are however pockets in and around Sydney where older buildings are still owned under company title.

When buying a property that belongs to a building with company title, you do not own the title. Rather, the company is the title owner, and you are purchasing shares in the company.

Shareholding
Each unit is allocated a shareholding. The shareholding was originally determined by the developer based on the value of the individual unit. It is these shares that are being purchased and the shareholder is issued with a share certificate.

The share certificate generally provides the shareholder with the right to occupy the property.

The share certificate is also the security that will be held by the bank or lending institution. Some banks or lending institutions may not fund the purchase of a company title property or may have strict criteria for lending on properties that are on company title.

Company Title – Management
The management of company title buildings differs greatly to that of strata title buildings. The strata legislation does not apply to company title buildings, instead the company Constitution will set out any rights or restrictions that apply to shareholders.

The company Constitution may limit the use of the property to owner occupied residents only or prevent the keeping of pets.

Company directors may also need to approve an incoming purchaser or potential shareholder and as part of the process the purchaser may be required to attend an interview. If tenants are permitted, this process may also apply to any potential tenant.

When purchasing a company title property, it is important that you understand the Constitution governing the company to ensure you not only understand your rights and obligations but that living in the property is the right fit for you and your lifestyle.