There are many company title home units in the more established suburbs of Sydney – in the east Potts Point and Elizabeth Bay, and in the north Kirribilli, Mosman and Neutral Bay.
Buying a company title property is like buying into any other company – you purchase shares.
Purchasers should keep in mind the fact that they are not buying a piece of land with a title registered at the Land Titles Office. The Company owns the land the building stands on. Shareholding entitles the owner of each group of shares to occupy a unit in the building as well as having a say in the conduct of the company.
Purchasers of company title home units should be aware that the land must not be mortgaged or encumbered by the company.
In addition, company title home units should have well-established sinking funds and administrative funds. These buildings are invariably older style properties that require ongoing maintenance and upkeep.
Matters to be considered by company title purchasers:
- All purchasers must be approved by the company.
- Some companies may allow units to be leased out while others may not. The purchaser should find out whether the company that controls the building permits leasing. This may not be an issue at the time of purchase, but it may be important later on.
- Mortgages can be sometimes difficult to obtain as they are secured by way of a charge over the shares as distinct from a mortgage over the land, and the company cannot give any individual owner a mortgage over the land.
