Company share V body corporate

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From: H T


Can anyone tell me why co.shares are less attractive than bod. corp flats?

thanks
 
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Reply: 1
From: Asy .


HT

Company shares are not necessarily 'less attractive' than body corp, it just depends on what suits you.

The main difference between the two is that the purchase and sale of company shares is covered by the corporations act, and not by the sale of land act.

The problem that you can have with CoShare properties is that 'technically' all the other owners of shares (units) in the company have 'right of veto' over who is allowed to purchase shares (units) in the company (although 'equal opportunity' laws seem to contravene this). The maintenance and other shared costs are distributed very similarly to how they would be in a body corporate.

Your solicitor will be able to advise you further, if you do not have one, feel free to drop me a line and I will give you a couple you can call.
 
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Stata Title v Company Title?

Reply: 2
From: Paul Zagoridis


I assume you mean Company Title vs Strata Title units.

My financiers normally say "quality of security".

A company often reserves the right to approve the transfer of shares and the process of sale (no auctions). So the bank has a harder time getting their cash if you default.

Dreamspinner
 
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Stata Title v Company Title?

Reply: 2.1
From: H T


Thanks folks

If a bank would be less enthusiastic about lending money on it then i guess the value at auction would be lower...
Would anyone like to estimate how much, if anything?

ta
 
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Reply: 3
From: Rolf Latham


Hi Ht

Co title units are less attractive simply because you need up to 6 times the equity than to purchase the same unit if strata titled.

Straight strata 95 % lend, Straight company title 70 % lend.

% rental return is a little better in com titles than strata because co title pricing is a little depresssed.

Ta


Rolf
 
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Reply: 3.1
From: Jill Lawson


It depends if you are planning to live in the unit or buying as an IP.
My mother lives in a Company Title unit in the eastern Suburbs of Sydney and has done so for many years.
For an IP it has the disadvantages of considerably lower finance available, tenants a no-no, or, if an exception is made, then prospective tenants are interviewed by the shareholders at an extraordinary meeting, (very daunting for some people!!) and if approved are allowed to become a tenant. In my mothers building there are 6 units and one of them has been rented for many years but usually for long periods each time and the shareholders are very fussy about the quality of tenant and do interview them before they are allowed in.
Also in Company Title you own shares in a building along with the others, different from owning your actual bricks and mortar of one of the units. This means there can be allot more restrictions on what alterations/changes etc. you can do to your unit. Any outside changes are very strictly monitored by the other shareholders and of course have to be discussed and approved.
Internally one can do mostly what they want, but for example, in my mums block, all units must have floor coverings (carpet) so as to keep noise down, as the building is the older style and has timber floors.
Of course any rules and regs. are documented for any prospective buyer to see, but be aware there is a big difference in just the style of living.
Oh I nearly forgot - any prospective buyer also has to be interviewed by the shareholders in the same manner as I explained about tenants, in my comments above. This is supposed to happen before settlement day to give the shareholders a chance to say NO if they so decide.
The advantages of buying Company Title as your home are, by the comments above, obvious.
You can have a say in who else lives in your block, have a say if they will allow tenants and if so who they are.
Generally they are owned by older people who are cashed up (finance not an issue) and want to live a quieter life style and want to have control over the standard at which the whole building and grounds are kept.
They used to be cheaper to buy and then cheaper to sell (related mostly to the difficulty in raising finance), but these days that does not seem to be the case. Two units have sold in my mums block in the last 3mths.(first for many years)and the prices they sold for were top of the general residential market price for any units in the same location.
I know many owners who would not buy any other than Company Title if it is for an owner/occupier situation.
Obviously, Strata Title is the way to go for an IP. - in my opinion.

Cheers
Jill L.
 
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Reply: 3.1.1
From: H T


thanks jill, very informative
 
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