Strata Title vs Company Title: What NSW Property Buyers Need to Know

You have found an apartment in one of Sydney's older inner suburbs. The building has character, the location is excellent, and the price sits noticeably below similar units nearby. Then you reach the fine print of the listing and see two words that appeared in none of the other advertisements: company title. Before you book a second inspection, work out what you would actually be buying. Strata title and company title give you very different forms of property ownership.

What Is Strata Title?

In NSW, most apartments, townhouses and villas sold today are held under strata title. A strata plan divides a building and its land into individual lots and common property. Your lot is what you own outright, usually the interior of your apartment, while common property covers shared areas, such as foyers, lifts, roofs and gardens.

Your strata lot is separately registered with NSW Land Registry Services, with you recorded as the registered owner. You also join the owners corporation, which manages common property, arranges insurance and collects levies from owners.

The Strata Schemes Management Act 2015 (NSW) and the Strata Schemes Development Act 2015 (NSW) govern how these schemes run.

What Is Company Title?

Company title works on a different foundation. A private company holds legal title to the whole building and the land beneath it, which makes the company the registered owner rather than you.

What you buy is a parcel of shares carrying the right to occupy a specific unit, and the number attached to each unit usually reflects its size, position or value. Instead of owning a separately registered title to the apartment, you acquire shares in the company that carry the right to occupy the unit. 

The building also runs on the company constitution rather than by-laws, and older companies may still call that document the memorandum and articles of association. A board of directors elected by the shareholders makes the decisions.

Company title predates strata legislation, which arrived in NSW in the early 1960s and became the standard way to subdivide apartment buildings. It survived mainly in blocks built before that point, which is why it appears so often in art deco buildings around Potts Point, Elizabeth Bay, Darling Point, Neutral Bay and Lane Cove.

How Strata Title and Company Title Compare

The differences are easiest to see side by side. What matters is not the label on the listing but the legal framework behind it, because that framework decides what you own and what happens when something goes wrong.

• What you receive: Strata gives you registered ownership of an individual lot. Company title gives you a share certificate and a right to occupy.
• Who sets the rules: Strata schemes run on by-laws made under the Strata Schemes Management Act 2015. Company title buildings run on a constitution, which sits under the Corporations Act 2001 (Cth).
• Who approves a sale: A strata owner can sell to any buyer they choose. A company title sale may require board approval before the shares can be transferred, depending on the company's constitution.
• How disputes are resolved: Strata owners can take most disputes to the NSW Civil and Administrative Tribunal. Company title shareholders rely on company law remedies, which are slower and poorly suited to an argument about a leaking balcony.
• How easily you can resell: Strata lots appeal to almost every buyer and lender. Company title units have a smaller buyer pool, because finance and board approval add friction to the sale.

What Company Title Changes About Your Purchase in NSW

Those differences change the contract you sign and the checks that happen before you commit. 

In its place, you should expect a company search, the constitution, share certificate or share register details, and the company financial records. These documents carry the information a strata certificate would normally give you, and they need proper review rather than a quick skim.

The company's constitution may require the board of directors to approve the transfer of shares to you. Some buildings treat this as a formality, while others ask buyers to attend an interview before the directors decide. No equivalent step exists in a strata purchase, and the sale cannot complete without approval, so the contract should deal with it clearly.

Cooling-off rights are the third difference, and the one of company title disadvantages that catches buyers out. The statutory cooling-off period under the Conveyancing Act 1919 (NSW) applies to residential property, which section 66Q defines as land with a dwelling on it, certain vacant land, or a strata lot. 

A company title purchase transfers shares rather than land, so that cooling-off period does not apply automatically. Any right to withdraw has to be negotiated into the contract before you sign. Contact us for a contract review, where one of our licensed conveyancers reads the contract, sends you a written summary of what matters, and requests changes from the vendor's representative before you make an offer or bid.

Finance, Land Tax and Selling a Company Title Unit

Money is where company title feels most different in day-to-day terms. Lenders cannot register a mortgage over a company title unit the way they do over a strata lot, because there is no separate title to secure. They generally take security over the shares instead, which can limit the number of lenders willing to finance the purchase. Lending requirements, including the deposit required, may also differ from a strata title purchase, so speak with your lender or broker early and confirm in writing that they will lend on the building.

Land tax works differently again. Section 21A of the Land Tax Management Act 1956 deems each company title unit to be a strata lot, so shareholders are personally liable for land tax on their own unit rather than the company being assessed on the whole site. Revenue NSW confirms that the shareholder lodges the return, and that the usual exemptions still apply, including the principal place of residence exemption.

The same features return in reverse when you sell. If you are selling property in NSW under company title, your buyer needs both board approval and finance.

Can a Company Title Building Be Converted to Strata Title?

Yes, and a number of Sydney buildings have done it. Converting company title to strata involves registering a strata plan under the Strata Schemes Development Act 2015 (NSW), which turns each unit into a separate lot with its own certificate of title.

The process is not automatic. It needs agreement from the shareholders, usually at a level set by the constitution, along with survey, planning and registration work. Because strata title is generally more widely accepted by lenders and buyers, conversion may improve the marketability of units in the building.

Speak With a NSW Conveyancer Before You Sign

Company title is not something to avoid on principle. Plenty of people own these apartments happily, and the lower entry price can be a real advantage once you understand what comes with it. The risk sits in treating the contract as a standard apartment purchase, because a company title purchase requires different documents and checks from a standard strata purchase.

Before you sign anything, speak with our NSW conveyancing experts. We review company title contracts, examine the constitution and company records, and explain what the building will and will not allow, all before exchange while you still have room to negotiate.

Frequently Asked Questions

What happens if the company directors refuse to approve my purchase?

Board approval is a condition of transferring the shares, so a refusal can end the transaction. The contract should therefore be conditional on approval, with a clear right to terminate and have your deposit refunded if it is refused. Your conveyancer should confirm the process and expected timing before exchange.

Can I rent out a company title apartment?

That depends entirely on the company constitution. Many company title buildings restrict leasing, and some prohibit it outright or require board consent for every tenancy. If the unit is an investment, check this before exchange rather than discovering it afterwards.

Do I pay stamp duty when I buy a company title unit?

Duty on transfers of shares and land use entitlements in NSW was abolished from 1 July 2016, so a straightforward purchase of company title shares does not generally attract transfer duty. Landholder duty can still apply in limited circumstances. Confirm the position with your conveyancer for your particular purchase.

Can I renovate a company title apartment?

Approval comes from the company under its constitution rather than from an owners corporation under by-laws. The process is less standardised, so requirements vary from one building to the next. Read the constitution before planning any work.

What is the main difference between strata title and company title?

With strata title, you own a registered lot in the property. With company title, a company owns the building and you own shares in that company that give you the right to occupy a particular unit.

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