Company Title is a form of title that allows individuals exclusive use to real estate. Whilst it is often associated with residential apartments it can also apply to office suites, industrial properties and shops.
It is a method of providing a form of individual ownership within multiple dwellings.
Company Title allows individuals to buy shares within a holding company that owns the entire building. Ownership of such shares confers certain rights and responsibilities upon the shareholders plus exclusive use to a particular apartment.
Prior to 1961 Company Title was a common form of title that allowed such ownership. It became less favourable as Strata Title was introduced into various states.
* New South Wales – 1961
* Queensland: 1965
* Victoria: 1967
* Western Australia: 1966
* South Australia: 1967
Company Title is still currently used by owners / developers in some instances to subdivide properties where council does not allow formal subdivision by way of Strata or Torrens Tittle.
Issues:
* The ownership of shares in a company is not considered at law to constitute real property but rather personal property. As a result lending institutions often do not accept them as suitable security or they have lower lending ratios as compared to real property.
* This can reduce their marketability and value in the property market as buyers will require a greater deposit. In addition few buyers understand the concept of Company Title and therefore can be put off by such title particularly where similar Strata Title properties are available for purchase.
* Other issues can include that renting of the property can be restricted by the * shareholders and only occupiers may reside in the property.
The sale of shares often requires the consent of the other shareholders, therefore the sale of shares is not necessarily guaranteed. However from practical experience it is seldom that the sale of shares is refused.
* Obtaining evidence of company title shares is very difficult as they are not required to be registered at any government department like real property is.