Company title property is a different kind of apartment ownership. A buyer is not simply buying a Torrens title lot or a strata lot. In broad terms, the building is owned by a company, and the buyer acquires shares in that company together with rights to occupy a particular apartment or area.
That structure can work well for some buildings and buyers, but the legal review is different from an ordinary strata purchase. The contract, company constitution or articles, share documents, occupancy rights and transfer rules all need attention before signing.
This guide is general information for NSW buyers. It is not legal, finance, tax, valuation or investment advice. If you are considering a company title property, obtain advice on the specific documents before exchange.
What is company title property?
Company title usually means a company owns the land and building. Individual residents or investors own shares in the company. Those shares are linked to the right to occupy a specific apartment, unit or part of the building.
The exact legal arrangement depends on the company documents and transaction documents. The right to occupy may be set out in the company's constitution, older articles, rules, occupancy agreement, share certificate or other documents used by that building.
This is why a company title purchase is document-heavy. A buyer should not assume that the arrangement works like strata simply because the property looks like an apartment.
Company title vs strata title
In a strata scheme, a buyer generally buys an individual lot and shares common property with other owners through the owners corporation. NSW Government strata guidance describes this structure as buying a lot, such as an apartment, while sharing ownership of common property.
Company title is different. The company remains the owner of the land and building, while the buyer owns shares in the company and relies on those shares and company documents for occupation rights.
That means the legal questions are different. A strata buyer usually focuses on the contract, strata plan, by-laws, levies, strata report and owners corporation records. A company title buyer must also review the company's governing documents, share structure, approval process and building rules.
For a strata-focused comparison, see our guide to buying a strata apartment in Sydney.
What does the buyer actually own?
A key question is whether the documents clearly identify the shares being acquired and the occupation rights attached to those shares.
Before exchange, a buyer should understand:
- the company that owns the property;
- the class and number of shares being transferred;
- which apartment or part of the building those shares relate to;
- whether any parking, storage, balcony or courtyard rights are included;
- whether occupation rights are exclusive, conditional or limited;
- whether there are restrictions on use, leasing or transfer; and
- what records confirm the seller's ability to transfer the shares.
A title search alone may not answer these questions. A company title review should also look at the company and share documents that create the buyer's practical rights.
Review the company constitution and rules
The company constitution, older articles or building rules can be central to a company title purchase. ASIC explains that a company can be governed by a constitution, replaceable rules, or both, depending on the company's arrangements.
For a company title building, those documents may affect:
- who can own shares;
- who can occupy the apartment;
- how transfers are approved;
- how directors or the board make decisions;
- maintenance and contribution obligations;
- renovation approvals;
- leasing and short-term accommodation restrictions;
- pets, noise, parking and common-area use; and
- what happens if a shareholder breaches the rules.
The wording matters. Older documents may use language or processes that do not look like modern strata by-laws. A buyer should have the documents reviewed before signing rather than discovering a restriction later.
Transfer approval and restrictions
Some company title buildings may require board or company approval before a share transfer is completed. Some may also restrict who can occupy the property, how it can be leased, or whether a buyer can use the apartment in a particular way.
These restrictions are not automatically good or bad. They may be part of the building's governance structure. The key point is that the buyer should know about them before exchange.
Questions to ask include:
- is board or company approval required before settlement?
- what information must the buyer provide for approval?
- can approval be refused, delayed or made conditional?
- are there restrictions on investors, companies, trusts or non-residents?
- are there rules about leasing, holiday letting, guests or short-term accommodation?
- are there transfer fees, application fees or administrative steps?
The contract should be checked to see how these approval steps affect timing, default risk and settlement obligations.
Finance, leasing and renovation issues
Company title purchases can raise finance questions because the security structure is not the same as a standard Torrens or strata title purchase. Buyers should speak with their lender, broker or financial adviser early and make sure any finance approval is suitable for the specific company title property.
Legal review can help identify the documents and restrictions that may be relevant to finance. It should not be treated as lender-policy, investment or valuation advice.
Buyers should also check whether the company documents restrict:
- leasing the apartment to tenants;
- short-term stays or holiday letting;
- renovations or structural works;
- flooring, wet-area works, air-conditioning or external changes;
- pets;
- parking and storage; and
- use of shared facilities or common areas.
Do not assume the position is the same as strata. The company documents and building rules should be checked for the particular property.
Records and documents to check before signing
A company title buyer should ask what company, property and building records are available before exchange. The exact documents will depend on the building and transaction.
Useful documents may include:
- the contract for sale;
- title search and property documents for the land owned by the company;
- company constitution, articles or rules;
- share certificate or share transfer documents;
- occupancy agreement or licence, if used;
- minutes of company or board meetings;
- financial statements, budgets and contribution notices;
- insurance information;
- records of maintenance, repairs or major works;
- records of disputes, applications or proceedings affecting the building;
- details of any managing agent, company secretary or building manager; and
- approval forms or procedures for transfer, leasing or renovation works.
Some of these documents may need to be requested from the seller, company, managing agent or other relevant party. A buyer should allow enough time for review before exchange.
Ongoing contributions, maintenance and governance
Company title owners may need to pay ongoing contributions to the company for building expenses, insurance, maintenance, repairs and administration. The terminology may differ from strata levies, but the practical concern is similar: the buyer needs to understand ongoing costs and possible future expenditure.
Questions to consider include:
- what regular contributions are payable?
- are there unpaid amounts linked to the shares or apartment?
- are major works or repairs being discussed?
- does the company have adequate records and financial information?
- who makes decisions about maintenance and expenditure?
- what voting rights attach to the shares?
- how are disputes between shareholders or occupants handled?
Where the issue is accounting, financial, building or engineering in nature, separate advice may be required.
When to speak with a property lawyer
Legal advice before signing is particularly useful if:
- you are unsure how company title differs from strata title;
- the contract includes unusual special conditions;
- the company constitution, articles or rules are old or difficult to interpret;
- approval is required before transfer or settlement;
- you plan to lease, renovate, keep pets or rely on parking or storage rights;
- finance approval depends on the company title structure;
- company records mention disputes, major works or financial issues; or
- you need the transaction documents explained before exchange.
For general purchase support, see our buying a property service page and our broader property law services. You may also find our guide on whether to choose a conveyancer or solicitor useful before instructing someone to review the contract.
Need help reviewing a company title property contract?
Biz Lawyers & Advisory can assist with reviewing company title purchase contracts, company documents, share transfer documents and practical legal issues that should be clarified before exchange.
We can help identify legal issues in the documents and point out where separate finance, valuation, tax, building or accounting advice may be needed.
Call us now: 1800-893-836
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This article is general information only and is not legal, finance, tax, valuation, building or investment advice. You should obtain advice about your own contract and circumstances before exchange.
