Types of Ownership

There are several types of ownership of land, and one of the least (and oldest)  common is Company Title, where you own shares in a the company that owns the land/building instead of owning shares directly in that land/building.  Hence, you have have be careful and review additional documentation like the Memorandum and Articles or Association that all companies in Australia have. 

You are buying shares of a company almost as if you are buying shares in, say, Telstra, but with special conditions, for example, you cannot sell without the approval of the other company directors/shareholders.

What is Company Title?

Company title is a form of ownership that pre-dates strata title, which was introduced in New South Wales in 1961. Company title means that the company owns the building of units and the land it occupies. Shares for the building are held in groups corresponding to the comparative value of the units as perceived by the original developers based on the size and location of the units in the building. The owner of a group of shares has the right to exclusive occupancy of their unit, subject to the Constitution of the Company. The share-owner does not have a title deed; instead, they have a Share Certificate.

Difference of Company Title vs Strata Title

• Company title differs from strata title in the following ways:
• Under company title, what is transferred is a group of shares.
• The Board of Directors of the company must approve prospective share owners to enable the settlement of the unit purchase, the sale to be completed, and the share transfer registered.
• Owners of company title units must seek the approval of the board of directors for any lease or transfer of company title before it can be executed.
• Renovations and other alterations to a company title home unit may also be subject to approval by the company title board of directors.

Considerations When Purchasing a Company Title

When talking about company title, people often state that 'you can’t rent in a company title building' or 'the banks won’t lend against company title'. These are generalizations that are sometimes true and sometimes false.

Some of the restrictions/allowances to look for when considering a company title purchase include:

• Are there restrictions on who may be approved to purchase the shares?
• Is renting of the unit allowed? Some buildings completely prohibit renting, meaning the shareholder must be in residence.
• If renting is allowed, are there restrictions?
• Does the tenant need to be approved by the company board?
• Is there any control on the weekly rental price that the flat may be leased for?
• Is there an exclusion period of ownership before renting is allowed?
• Is there a time limit to how long a unit may be let?
• Do the articles limit or restrict the level of mortgage that may be taken against the shares?
• Are there restrictions upon the style or plan of any renovations to the flat?
• Can the board resume shares if they feel the owner is not appropriate?

Amendments to Section 34A of the Local Court Amendment (Company Title Home Unit Disputes) Act 2013

There have been significant changes to Section 34A of the Local Court Amendment (Company Title Home Unit Disputes) Act 2013, which relate to jurisdiction on company title home unit disputes. The amendments include the following:

1. The Court has jurisdiction to hear and determine proceedings involving company title home unit disputes.
   
2. A company title home unit dispute is a dispute between interested parties about any of the following matters:
   
   • The health, safety, and security of persons occupying or visiting the land owned by a company title corporation or residential premises located on that land.
   • The common property on the land owned by a company title corporation.
   • The use of residential premises located on the land owned by a company title corporation occupied by a shareholder of the corporation.
   • The behaviour of persons occupying or visiting the land owned by a company title corporation or residential premises located on the land.
   • The refusal by a company title corporation to allow a shareholder to grant a lease or licence to use or occupy premises located on the land owned by the corporation. A company title home unit dispute is a dispute between interested parties about any of the following matters:
   • Administrative matters relating to the running of a company title corporation.
3. However, a company title home unit dispute does not include the following:
   • A dispute arising under a residential tenancy agreement to which the Residential Tenancies Act 2010 applies.
   • A dispute arising under a lease to which the Landlord and Tenant (Amendment) Act 1948 applies.
   • A dispute about the sale, transfer or other disposition of shares in a company title corporation or the forfeiture of such shares.
   • A dispute about any matter that is a superior court matter within the meaning of the Corporations Act 2001 of the Commonwealth.
4. In determining proceedings involving a company title home unit dispute, the Court may make any of the following orders:
   • An order requiring a person to do, or refrain from doing, any act.
   • An order for the payment of damages or other money.
   • An order declaring the rights and obligations arising under a constitution of a company title corporation or any other contract or agreement.
   • An order declaring the meaning of any term of a constitution of a company title corporation, or of any other contract or agreement, or declaring that any such term is or is not void, invalid, or otherwise unenforceable. However, the Court does not have jurisdiction to make an order on a money or other claim in the proceedings that would exceed the jurisdictional limit of the Court under this Part when sitting in the Division concerned.

Why Choose CM Lawyers?

Our Sydney-based conveyancers at CM Lawyers understand the legal intricacies of living, owning, and investing in a company title building. CM Lawyer’s company title conveyancers are familiar with the types of issues, claims, and matters and disputes that arise in company title disputes. If you require any assistance with a company title property dispute or you are experiencing problems with your company title neighbour, please contact CM Lawyers.

The CM Lawyers conveyancing team covers the following areas:

• Preparation of Deed of sale of shares in Company title.
• Act and advise on the sale or purchase of Company title units.
• Provide legal assistance in relation to Company title disputes.

Let the benefit of our experience work in your favour; we have years of experience in assisting clients with company title disputes in Sydney’s Inner West and beyond.