Stratum v Company Share

Discussion in 'Legal Issues' started by buzzlightyear, 8th Sep, 2008.

  1. buzzlightyear

    buzzlightyear Member

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    I am confused with the differences between Stratum & company share title. It is my understanding that they are very similar but in talking to a so-called expert during the weekend, they inferred that there is not much difference between Stratum & Strata, with company share being the poor cousin. Is that true?

    Regarding finance, understand for company share there is a difference but do banks have different lending policies with regards to stratum & strata titles? :confused:
     
  2. Raddles

    Raddles Member

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    Types of Property
    There are several different types of property with the most common being; vacant land, house and land, and home units. There are also different forms of title which you will need to know about.


    For example,

    • Strata Title: This is a title for units/apartments/flats and may or may not include car parking. Check if there is car parking and there is, check if it is allocated by the body corporate, that is, incorporated in the unit title, or on separate title. In a strata title, liability for the common property is shared.

    • Stratum Title: This form of title is similar to strata title however instead of sharing ownership of common property with the other title holders, the owner has shares in a company which holds the title to, and is responsible for maintenance, management and administration of the common property. One problem with stratum titles is, as you may find that no bank will accept it as security, and for this reason they can be difficult to sell. Stratum title properties are often sold by auction, so that they are sold for cash. Auctions lessen the likelihood that an inexperienced purchaser will discover that they are buying a stratum title unit.

    • Torrens Title: System of recording ownership of property where registration on the certificate of title guarantees ownership. This law was previously known as, General Law Title

    • Company Share Title: With this title, the purchaser does not actually own a title. Instead, the purchaser is allocated shares in a company that owns the title. On sale the shares are transferred.
     
    Last edited: 8th Sep, 2008
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  3. Peter_Tersteeg

    Peter_Tersteeg Finance broker/strategist

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    I'm not sure of the exact policy differences, but you'll go through a lot of pain for a lender to accept a company share title. I imagine from the previous description that Stratum title would be even more difficult. Fortunately both are relativity rare nowadays.