Commercial Law | Company Title

A company title and a strata title can have an unclear difference which can cause some confusion on their legal implications. We can avoid this uncertainty in definition through the description stated under the NSW law.

Definition of Company Title

Company Title existed before strata title did, and it was introduced in NSW in 1961. Company title brings about that the company owns the property it occupies, such as the building of units and the land that it is on. The shares for the building are grouped corresponding to the equivalent value of the units as estimated by the original developers, based on some factors like the size and location of the units. This set up also means that a share-holder will not have a title deed, but instead they will have a Share Certificate.

The company title differs from the strata title in the following ways:

  • During a transfer, a group of shares are transferred under the company title;

  • The Board of Directs of the company must approve prospective share owners to enable settlement of the unit purchase, sale to be completed and the share transfer registered.

If you own a company title home unit, it means that you have the right to live in the property through the ownership of a group of shares; the board of directors should approve the owners of company title units first before any lease or transfer can be made. In addition to this, should any renovation or other alterations to a company title home unit can be done, it will also be subjected for approval of the board.

There are some generalisations when talking about company titles. People often state that you cannot rent in a company title building or that the banks would not lend against company title. These statements are sometimes applicable, but there are times that they are not.

Here are some restrictions/allowances to look for when deciding on a company title purchase:

  • Find out if there are restrictions on who may actually be approved to purchase the shares. For instance, does a minor criminal infringement preclude board approval?

  • Find out if renting out the unit is allowed (that is, subletting given you are already the ‘tenant’)? Some buildings completely prohibit renting (that is, the shareholder must be in residence).

  • You must know the conditions and restrictions if renting is allowed.

    • Does the tenant need to be approved by the company board?

    • Is there any control on the weekly rental price (minimum or maximum) that the flat may be leased for (for example, some buildings may set a minimum rental price to ‘control’ the ‘quality’ of tenant)?

    • Is there an exclusion period of ownership before renting is allowed?

    • Is there a time limit to how long a unit may be rented?

    • Do the articles limit or restrict the level of mortgage that may be taken against the shares (for example, some buildings insist on certain levels of equity/deposit to purchase)?

    • Are there restrictions upon the style/plan of any renovations to the flat (for example, some buildings control the use of certain tiles/materials hoping to maintain character)?

    • Can the board resume shares (for example, if the board feels the owner is not ‘appropriate’; they can seek to resume the shares and force their sale, essentially evicting the owner)?

Some company title buildings are restrictive, and some are lenient with your usage of your company title.

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

There have been major modifications 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 (including, for example, safety of children on the premises and waste disposal),
  • the common property on the land owned by a company title corporation (including, for example, parking and vehicle access, repair and maintenance, design and appearance),

  • the use of residential premises located on the land owned by a company title corporation occupied by a shareholder of the corporation (including, for example, external appearance of premises or the keeping of pets),

  • the behaviour of persons occupying or visiting the land owned by a company title corporation or residential premises located on the land (including, for example, noise),

  • the refusal by a company title corporation to allow a shareholder of the corporation to grant a lease or licence to use or occupy premises located on the land owned by the corporation,

  • administrative matters relating to the running of a company title corporation (including, for example, levies).

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.

The Court may decide to make any of the following orders during determining proceedings involving a company title home unit dispute:

  • 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 or;

  • 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.

Be advised that the Court does not have any jurisdiction to make an order on a money claim or any other claim in the proceedings that is exceeding the jurisdictional limit of the Court under this Part when sitting in the Division concerned.

The Executive Legal has Sydney-based conveyancers who fully understand the legal details of living, owning and investing in a company title building. Our convyancer lawyers are much acquainted with the types of issues, claims and matters and disputes that arise in company title disputes.  Should you find yourself in need any assistance with a company title property dispute or you are experiencing problems with your company title neighbor, you can contact Executive Legal for the best lawyers in Sydney.

Executive Legal Sydney-based conveyancing lawyer team Are experienced the following areas:

  • Preparation of Deed of sale of shares in Company title.

  • Act and Advise on the sale or purchase of Company title unit.

  • Provide legal assistance in relation to Company title disputes.

Our experienced team can work to get the odds in your favour. Our expertise and years of experience in assisting clients who have company title disputes will help you benefit in your case.

 

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