What's wrong with Company Title?
- Thread starter Harriet
- Start date
Be interested to know why as we just bought one today .....
Each draw back can be seen as an advantage.
It's an older style of title . A company owns the building and you own shares which give you the right to use that unit.
The banks are less willing to lend for them and will also not lend as high an LVR. One rival bidder dropped out due to financing problems.
Lots of company titles have been converted to stratas in some areas , though with some blocks it might be expensive if the building has problems complying with current regulations .
Sometimes the rules of the company will put restrictions on what you can do in the unit. Some will only allow owner occupiers to live there and technically they might have the right to veto tenants . Our block does allow tenants and with our purchase , now only three units out of 10 will be owner occupied.
Technically they also have to approve new owners to make sure you are acceptable ... ( are you ?? hopefully we are ...
) . If we're deemed unacceptable the contract will lapse . I have my fingers crossed.
Cliff
Each draw back can be seen as an advantage.
It's an older style of title . A company owns the building and you own shares which give you the right to use that unit.
The banks are less willing to lend for them and will also not lend as high an LVR. One rival bidder dropped out due to financing problems.
Lots of company titles have been converted to stratas in some areas , though with some blocks it might be expensive if the building has problems complying with current regulations .
Sometimes the rules of the company will put restrictions on what you can do in the unit. Some will only allow owner occupiers to live there and technically they might have the right to veto tenants . Our block does allow tenants and with our purchase , now only three units out of 10 will be owner occupied.
Technically they also have to approve new owners to make sure you are acceptable ... ( are you ?? hopefully we are ...
) . If we're deemed unacceptable the contract will lapse . I have my fingers crossed.Cliff
primarily they are a lesser quality title due to the reasons Seech has mentioned.
Some banks wont do them at all, those that do will limit the Loan to value ratio to 80 or 85 %.
This then limits the range of buyers and thus affects the value somewhat
ta
rolf
Some banks wont do them at all, those that do will limit the Loan to value ratio to 80 or 85 %.
This then limits the range of buyers and thus affects the value somewhat
ta
rolf
Primarily because your faith as owners is very much depends on the share holders and directors decisions. If they decided they don't like you, they can vote to kick you out and all sorts of complication brought by majority votes.
Think about you're a shareholders of St George and you don't want to sell it up to Westpac, the majority of votes is going against your wish.
With strata, as long as pay your strata fees you're pretty much can fight to the end to get your wish and you can register yourself as exec commitee. Stara is also relatively small so you can reason.
Think about you're a shareholders of St George and you don't want to sell it up to Westpac, the majority of votes is going against your wish.
With strata, as long as pay your strata fees you're pretty much can fight to the end to get your wish and you can register yourself as exec commitee. Stara is also relatively small so you can reason.
Primarily because your faith as owners is very much depends on the share holders and directors decisions. If they decided they don't like you, they can vote to kick you out and all sorts of complication brought by majority votes.
Think about you're a shareholders of St George and you don't want to sell it up to Westpac, the majority of votes is going against your wish.
With strata, as long as pay your strata fees you're pretty much can fight to the end to get your wish and you can register yourself as exec commitee. Stara is also relatively small so you can reason.
So Mom , have you ever heard of that happening ??
On what background knowledge are you make that fairly sweeping / Simplistic statement.
Cliff
That's just my personal view. Since you don't actually owned the property, you only own shares of the property.
Its law a bit of a put off:
http://www.lawlink.nsw.gov.au/lawlink/lrc/ll_lrc.nsf/pages/LRC_r115report#chp02
Anyway, there is a reasons why most financier classifies company title as restrictive securities and Genworth "Company Title (subject to reduced LVR, generally 85% maximum)".
But hey, if you've got the apartment in the heart of the city looking over darling harbour, who cares?
Its law a bit of a put off:
http://www.lawlink.nsw.gov.au/lawlink/lrc/ll_lrc.nsf/pages/LRC_r115report#chp02
Anyway, there is a reasons why most financier classifies company title as restrictive securities and Genworth "Company Title (subject to reduced LVR, generally 85% maximum)".
But hey, if you've got the apartment in the heart of the city looking over darling harbour, who cares?
I don't think it generally happens. But the legal ability for the owner's company to do it is still there.
If the bank foreclosed and took possession, the other owners could make things very difficult for the bank if they wanted, for instance limiting tenants or vetoing any sale of the unit. That's what the bank is scared of and why they will not lend as much on company title.
- Dave
I think there are some rat bag Company titles around.
A mate of mine entered into contract (and finally settled) on a company title unit it took him over 6 months to settle with all sorts of BS getting approval.
In this case the block is all OO with future problems if he wants to tenant it.
I have suggested he get himself appointed to the board so that he can exert some influence.
The other aspect of this block is that there is no fire safety control in place. Its like the whole block was built as a standard house. Thus if they were ever to try and strata there would be substantial costs in upgrading the building.
Cheers
A mate of mine entered into contract (and finally settled) on a company title unit it took him over 6 months to settle with all sorts of BS getting approval.
In this case the block is all OO with future problems if he wants to tenant it.
I have suggested he get himself appointed to the board so that he can exert some influence.
The other aspect of this block is that there is no fire safety control in place. Its like the whole block was built as a standard house. Thus if they were ever to try and strata there would be substantial costs in upgrading the building.
Cheers
This is the case in our block. A search showed that the block did consider voluntarily doing the fire upgrade recently ( No council order as of yet ) and the quote was included in the company minutes when we did our searches.
We made allowances for this when we looked at the purchase . If the block does go down this way ( it will at some time due to council orders ) that can only increase the value of the units.
Bottom line is how good a deal can you get for the purchase . In our purchase I think we've bought 20 - 25 % undervalue in a very good location in a very good centrally located suburb in Sydney. We're going to renovate and then revalue before we get finance on the property.
Cliff
