Company Title vs. Strata Title

Have you ever been confused about the differences between company title and strata title?

Have you been told that company title may not be as good as strata title but you are not sure why? This article explains the main differences between the two so that you can make a more informed decision if ever you look to buy a property subject to company title.

Before the concept of strata title was introduced in the 1960s, company title had developed to provide for the separate ownership of apartments. For the first time, this allowed people to buy an apartment rather than a house with the majority of company title home units set up in the 1920s and 1930s.

Benefits and disadvantages of company title

Benefits of company title
Company title apartments are generally not as expensive as comparable strata apartments.

The residency of the company title building is controlled as, before shares can be transferred, the prospective owner must first be approved by the Directors of the company.

It is often easier and simpler to address issues with the management of the Company Title building than with a Strata Title manager.
Where renting is permitted, the tenant will more likely than not also have to be approved by the company's Board.

Disadvantages of company title
The value of the unit owned through shares is unlikely to increase at the same rate as units owned under strata title.
Some lending institutions have more restrictive lending criteria for units subject to company title.

The company directors must approve the incoming purchaser of the company title unit and this can restrict the size of the market for the seller.

A company title owner would be advised to be thoroughly familiar with the company's constitution as failure to comply with the constitution may have potentially serious consequences, including the forfeiture of the right to occupy the property.

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