COMPANY TITLE & STRATA TITLE – THE PROS AND CONS

There are several pros and cons to consider when looking to buy an apartment with either Strata Title or Company Title

Strata Title Property

Pros:

1. Legal Ownership: Owners hold individual title to their unit, providing clear ownership rights.

2. Easier Financing: Strata properties are generally easier to finance, with banks more willing to lend on them.

3. Defined Common Areas: Common property is clearly defined, and owners collectively manage it through a strata scheme.

4. Greater Transparency: Strata schemes must follow the Strata Schemes Management Act, providing a structured framework and obligations.

5. Potential for Capital Growth: Strata properties can appreciate in value and are often more in demand in urban areas.

Cons:

1. Strata Fees: Owners are responsible for regular strata fees, which can increase and cover maintenance, insurance, and management.

2. By-law Restrictions: There may be restrictions on what owners can do with their property, including renovations and pet ownership.

3. Disputes: Conflicts can arise between owners or with the strata committee, which may require mediation.

Company Title Property

Pros:

1. Flexibility: Often more flexible regarding use, renovations, and pet ownership compared to strata properties.

2. Lower Fees: Typically lower management fees, as there may be fewer administrative requirements.

3. Potentially Unique Properties: Company title properties can include unique buildings or configurations that may appeal to certain buyers.

Cons:

1. Complex Ownership Structure: Ownership is through shares in a company, which can complicate sales and ownership rights.

2. Financing Challenges: Obtaining a mortgage can be more difficult, as lenders may have stricter requirements or may not lend at all.

3. Limited Rights: Shareholders may have less direct control over decisions affecting the property compared to strata owners, especially as a rental property hence may lead to longer vacancy periods and some impose restrictions on renting out units.

4. Lack of Regulation: Company title properties are not regulated under the same framework as strata properties, which can lead to inconsistencies in management and governance. This can lead to misunderstandings, potentially affecting tenant retention.

5. Limited Buyer Pool: Many buyers prefer strata title properties due to their straightforward ownership structure. This can make it harder to find interested buyers for a company title property.

6. Potential for Lower Resale Value: Due to the factors mentioned above, company title properties might not appreciate as much in value compared to strata properties, leading to a lower resale price.

Conclusion

Choosing between strata title and company title largely depends on personal preferences, financial situation, and long-term goals. Strata title offers clearer ownership and better financing options, while company title may provide more flexibility but with potential complications. Careful consider should be given to both options and consult with a real estate professional or?legal?advisor.