IP as a company share

Hi there,

Could someone tell me if there is a difference if I buy a property as a company share as opposed to standard title? i.e. a block of flats is owned by a company, I buy one flat as a company share.
Thank you.
 
Hiya

The biggest issue MAY be that mortgage insurers wont touch it.

You can get to 80 % Loan to Valuation Ration, but thats it.

Ta

Rolf
 
Originally posted by Rolf Latham
Hiya

The biggest issue MAY be that mortgage insurers wont touch it.

You can get to 80 % Loan to Valuation Ration, but thats it.

Ta

Rolf

Thanks for your reply Rolf. Would there be any other issues / drawbacks? anything to look out for? Would the company have any control over the property I purchased?
Thanks again.
Jerry
 
Hi if you are talking about a company title block then yes the company can have alot to do with how you manage your unit. Be very careful they are not cheaper than strata title for no reason. You have to read the memorandum of the company carefully.

One of them I came across did not allow the owner to rent the unit out it had to be owner occupied. They can kick you out of the unit if you don't pay or agree with the levies that are voted for even if you own the shares for that unit.
Also be carefull if one person has the majority of shares in the company i.e he ownes more than half the shares. I came across one of these and this guy would hold a meeting and basically bring up any issue he liked eg renovations, levies, the sale of the common areas etc and he would vote and always win it was like the others didn't even exist.
 
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Hi

The main reason for the development of Strata title was to overcome ALL the many problemss associated with Company title.

Insurance, borrowing of finance, purchase and sale of a share(s) (the rest of the board can simply refuse the transfer and you're stuffed, unequal voting powers, any matter that the Majority of the board demand and so on.

Company Title, leave it alone unless you are a masochist.

Regards

Ross
 
The other very odd thing about company title is that TECHNICALLY (and I say technically, because I have never heard of it actually happening, but the possibility is there...) the current "shareholders" have the ability to veto a sale to a new 'shareholder'.

What this means is that if you want to sell to, say, the DoH, or the local bikie gang, the other owners of the other units can stop your sale.

Please let me reiterate that I am not a solicitor, get legal advice on this, it's just something I remember from real estate school. You know, in between when they were teaching us to, what was it, "rip little old ladies off"... The other thing to remember is, I don't know of when this clause was ever used, but it is there.

asy :D
 
Hi

Yes Asy you are correct. But the proposed purchaser doesn't have to be the DoH or a Bikie Gang to get the thumbs down but may be an upright citizen like you or me.

If the seller has had a falling out with one of the other shareholders then that shareholder can vote no just out of spite and no it is.

I don't know of too many Company titles registered in the last several decades, but I do know of many that have complied and registered as Strata titles. The likely elements that will hold them back is that Councils use the proposed title change as a way to demand off street car parking and several other requirements or pay to Council a large slab of penalty money.

This then becomes too expensive so a change does not go through.

Regards

ross
 
Peter Spann has used a company title as an interim step, after buying a block of flats as a single unit, to get renovations done. After the renovation has been done, he converts it to strata. The company title apparently helps to get the approval through more easily, and the BC is responsible once things get done.

Sorry if i have not got this quite right- any questions, ask PS.
 
Hi

Buying a Company Titled block of flats, renovating, Strata Titling, value adding and selling is a great way to make a dollar. Peter Spann is on to a good thing.

In some areas of Sydney where company title has been in existance for a long time, such as East Sydney, it sometimes can be a little more difficult.

Some Councils take this as the opportunity to improve the general residential quality of some older blocks of flats / units.

Carparking is one example. Council may require that prior to allowing the new Strata title, offstreet car parking should be provided. Say one car space per unit plus one visitor space per two units. Now as the original flats were built occupying the maximun land space and it is not possible to excavate beneath the building, then either there is no action taken, a knockdown and rebuild situation occurs or Strata title goes ahead providing the Developer / Builder pays an enormous dollar penalty to Council. Council then takes the responsibility of providing offstreet carparking elsewhere.

Council takes this opportunity to improve its electorate at the Developers / Builders expense and get cars off the street.

I guess this is fair enough as long as you as the Investor / Developer / Builder are well aware of this in advance.

Regards

Ross
 
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