Stratum Title vs. Strata Title?

Hi there,

I'm looking at a villa unit that is one of four in a block and the agent tells me it is ''stratum title'', and that the courtyard attached to this unit is not owned by me but buy a company?

It's going for a good price, but not sure if this is something to be wary of??

Does anyone know whether this is a big negative to avoid?

Thanks.
 
Differnt states use the word 'Stratum" differently but i have only heard it used to mean company title in Victoria.

It woudl be worth finding out of they are any plans to cnage to strata title in the near future. Umm....maybe not a bad idea to buy up a block and then convert it....
 
Hi JIT,

typically lenders and mortgage insurers are less inclined to lend more to stratum (i.e. LVR). This is a very important issue, because more stringent policy on a property, reduce the potential to buy the property (i.e. less market), and with policy getting even tighter, you may find this gets worse. For instance if it becomes the situation where no lender lends above 80% to stratum, but 90% to the remaining property classes, then I see this as a similar problem to heritage listed properties etc.
 
Thanks for the replies.

The agent I dealt with suggested to me that stratum was slightly different to company title, which I think might be the case. But, it seems that lenders' view of this isn't favourable either way.

Giving this property a miss anyway.
 
Thanks for the replies.

The agent I dealt with suggested to me that stratum was slightly different to company title, which I think might be the case. But, it seems that lenders' view of this isn't favourable either way.

Giving this property a miss anyway.

The agent is correct. Stratum title is ownership of the villa unit in your case, plus a share in the service company that manages the common property. Owners have the right under a service agreement to use the common property. Whereas company share, is a share of the company that owns the entire block (inclusive of flats & what you might otherwise describe as common property)

I wouldn't have thought banks would see a huge difference between strata and stratum. Definitely a big difference with company share.
 
The agent is correct. Stratum title is ownership of the villa unit in your case, plus a share in the service company that manages the common property. Owners have the right under a service agreement to use the common property. Whereas company share, is a share of the company that owns the entire block (inclusive of flats & what you might otherwise describe as common property)

I wouldn't have thought banks would see a huge difference between strata and stratum. Definitely a big difference with company share.

Thanks, I'm not really sure what the banks might say with this then?
 
Since you own the unit itself outright, and only the common areas are company owned, don't think the bank will have much of a problem.

The problem with company title arises because the other owners could veto a sale, restrict tenants, etc, if the bank were to take foreclose. This is not a problem for stratum title.
 
stratum is the plural of strata, which means there is more than one strata plan covering the block of land. no big deal at all.
 
stratum is the plural of strata, which means there is more than one strata plan covering the block of land. no big deal at all.

Technically no big deal. However, for whatever reason, the banks and insurers can be picky with this title and hence it creates indirect impact on the ability to market your property 100%.
 
Since you own the unit itself outright, and only the common areas are company owned, don't think the bank will have much of a problem.

The problem with company title arises because the other owners could veto a sale, restrict tenants, etc, if the bank were to take foreclose. This is not a problem for stratum title.

i think you will find these days there isn't so much of a problem with company title... haven't heard of any recent cases of sales being restricted or renting to tenants being a problem.. i know we have serveral company title units on the rent roll and most dont even bother interviewing tenants anymore like they used to. Most of the big banks will now lend on them too.
 
Lenders mortgage insurance i.e PMI and Genworth : Classified stratum titles as unaccepatable securities.

Steer away.
 
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