Company Title Vs Strata Title Australia: Why The Difference Matters For Finance

Most Australian apartment buyers assume every unit or apartment comes with the same type of title, but that's not the case. A small but significant number of older buildings, particularly in inner-city Sydney and Melbourne, are still held under company title rather than the more familiar strata title.

The distinction sounds like legal fine print, but it has real consequences for how easily you can get finance, how you can use the property, and how quickly you can sell it. Investors who don't check the title type before falling in love with a property can run into serious problems at the finance stage.

How Strata Title Works

Strata title is the standard ownership structure for the vast majority of Australian apartments and townhouses built from the 1960s onward. Under strata title, you own your individual unit outright and hold a share of the common property, such as stairwells, gardens, and shared facilities, together with the other owners.

Because you hold direct title to your unit, strata properties are treated by lenders in much the same way as a standalone house, and the vast majority of banks lend against them without hesitation.

How Company Title Works

Company title is an older structure, common in buildings constructed before strata legislation existed in most states. Instead of owning your unit directly, you own shares in a company that owns the entire building, and your shareholding entitles you to occupy a specific unit under a company constitution and any exclusive occupancy agreement.

This structure means you don't hold a registered title to real property in the conventional sense — you hold shares, plus a right of occupancy tied to those shares.

Why Lenders Treat Them Differently

Because company title involves owning shares rather than a registered title, it's treated as a higher-risk security by most lenders. Many mainstream banks either won't lend against company title property at all, or will only lend a reduced percentage of the purchase price, sometimes as low as 60-70%.

This means buyers typically need a larger deposit, and the pool of lenders willing to finance the purchase is much smaller. Specialist or non-bank lenders sometimes fill this gap, but usually at a higher interest rate.

• Confirm the title type before making an offer, not after
• Ask your mortgage broker which lenders currently accept company title in that specific building
• Expect a larger required deposit than a comparable strata property
• Check whether the company constitution restricts subletting to investors
• Factor in a longer, more document-heavy approval process

Restrictions On Use And Subletting

Company constitutions can impose conditions that strata by-laws typically don't, including outright bans on renting the unit to tenants, requirements for board approval before you can sublet, or restrictions on who can buy shares in the company at all.

This is a critical check for investors specifically, since a company title building that prohibits or restricts letting to tenants may be entirely unsuitable for an investment purpose, regardless of how attractive the price looks.

• Request a copy of the company constitution before signing a contract
• Confirm in writing whether subletting to investors is permitted
• Check if board approval is required for any new purchaser
• Ask about any restrictions on renovations or alterations

Impact On Resale And Liquidity

Company title properties generally attract a smaller pool of buyers because of the financing hurdles and use restrictions, which can translate into longer selling periods and, in some cases, lower achieved prices compared to an equivalent strata property nearby.

This reduced liquidity is worth weighing carefully against any perceived value the property offers at the point of purchase.

Final Word

Company title isn't automatically a red flag, and some buyers are drawn to these buildings for their character, location, or lower purchase price. But the financing and use restrictions are real, and they need to be understood well before you're locked into a contract.

Always confirm the title type early in your due diligence, and speak to a broker and solicitor familiar with company title transactions in your target area before committing.