Company titled land

Discussion in 'Legal Issues' started by Tattler, 28th Feb, 2018.

Join Australia's most dynamic and respected property investment community
  1. Tattler

    Tattler Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    1,065
    Location:
    Sydney
  2. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

    Joined:
    18th Jun, 2015
    Posts:
    41,570
    Location:
    Australia wide
    This is residential, but generally LVRs are restricted to 70%. St G used to go to 80% with LMI.

    You are essentially buying shares in a company which owns the land and the constitution of the company gives each owner the right to occupy certain units of the building on the land.
     
    qak likes this.
  3. Tattler

    Tattler Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    1,065
    Location:
    Sydney
    How is that different from strata title from the bank's lending point of view? I would have thought for strata titled, each title holder owns certain percentage of land .....
     
  4. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

    Joined:
    18th Jun, 2015
    Posts:
    41,570
    Location:
    Australia wide
    You don't have an interest in the land with a company title, with strata you do. You can mortgage the land. Company title will involve mortgaging the shares.
     
  5. Ross Forrester

    Ross Forrester Well-Known Member

    Joined:
    30th Oct, 2016
    Posts:
    2,085
    Location:
    Perth, Western Australia
    I have heard it referred to as purple title as well.
     
  6. JDM

    JDM Well-Known Member

    Joined:
    19th Jan, 2016
    Posts:
    465
    Location:
    Brisbane
    My understanding of why banks don't like it is because the company can have control over who can buy the property. This is like in America where buyers sometimes have to be approved before they can buy into certain buildings. This means if the bank exercises power of sale, it can be much more difficult to find a buyer and have them approved. This is in addition to the other issues of a company having large control which can be to the detriment of a minority owner.

    The other consideration is that the body corporate/owners corporation legislation will generally not apply for that building.
     
  7. Jane Ridder

    Jane Ridder Well-Known Member

    Joined:
    22nd Feb, 2018
    Posts:
    176
    Location:
    Sydney
    If the title arrangements were originally torrens when they purchased, then discovering that they had a company titled property all of a sudden would be a nasty surprise. And imagine being upset about owning a duplex in Randwick...