Company Title

Looking for a little clarity around company and strata title? Keep reading.

The difference between company title and strata title can be unclear. As such, the legal implications of both can be foggy. Let's start by defining company title and how it differs from strata title under NSW law.

What's 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 entails that the company owns the building of units and 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.

Company title differs from strata title in the following ways:

  • Under company title what is transferred is a group of shares;
  • 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.

Owning a company title home unit generally means that you have the right to occupy the property through the ownership of a group of shares; owners of company title units must seek the approval of the board of directors of company title apartments to consent to any lease or transfer of company title before it can be executed, and; renovations and other alterations to a company title home unit may also be subject to approval by the company title apartments board of directors. 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 generalisations, which, in fairness, are sometimes true. They are also sometimes well and truly false.

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

  • Are there restrictions on who may actually be approved to purchase the shares (for example, does a minor criminal infringement preclude board approval)?
  • Is renting of the unit allowed (that is, subletting given you are already the ‘tenant’)? Some buildings completely prohibit renting (that is, 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 (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 (for example, no rental for the first 12 months of ownership)?
    • Is there a time limit to how long a unit may be let (for example, five years, then must be returned to owner/occupied)?
    • 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)?

You may find that some company title buildings are quite restrictive and others will allow you to do whatever you please with your company title.

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 (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.

Note: Section 1337E of the Corporations Act 2001 of the Commonwealth confers jurisdiction on the Local Court in relation to civil matters (other than superior court matters) under that Act. Examples of superior court matters in relation to company title home unit disputes include the winding up of a company title corporation or the oppressive conduct of a company title corporation’s affairs.

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 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.

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.

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 neighbor, 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 unit.
  • 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.

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Contact the team at CM Lawyers today to get more information on how we can assist you with company title disputes and set up an appointment. You can ring us during business hours or fill out an enquiry form to get a quick response from our solicitors team.