Strata Title And Company Title: What’s The Difference?

When you buy a property that is an apartment, unit or townhouse (unless you buy the whole building) it will come under a title of either ‘strata’ or ‘company’. At WA Strata Management we hear people ask all the time for clarification of these two titles so we feel that it is important for you, the buyer, to be aware of what it all means. So what do these terms mean and what do they mean for you as the buyer of the property?

Strata Title

A strata title allows for a system that handles the legal ownership for a portion of a building, such as an apartment, townhouse or unit. When you buy one of these types of property these days (since 1961) it is likely that it will come under a strata title, which allows you to have exclusive ownership of your own dwelling while using the communal parts of the building. When buying a property in a building that works under a strata scheme, you will need to do a strata search to familiarise yourself with the workings of the organisation that looks after the whole building. As a member of a strata organisation (as an owner) you will be required to pay levies for maintenance and other expenses, attend general meetings and vote on decisions about the property.

Company Title

Before 1961, when the strata title mode of operation was first developed, these types of properties (units, townhouses and apartments) came under a company title, which allowed for the owner to buy a share in the company that holds the title of the building. This system is not used widely today and all new buildings would fall under a strata title.

In a company title situation, the company directors do not need to consult shareholders on any of the decisions that they make. Buildings that fall under a company title can also restrict how you use the property, and it can make the final decision about whether people can rent the property, who can buy it, and what changes can be made. Many banks will be reluctant to lend money to buy a property that comes under a company title. At WA Strata Management we recognise that it could be a beneficial investment to buy a property that is under a company title as if it is changed to a strata title it will increase the value of the property.