Company title home loans
Some of Sydney's most characterful older blocks, art deco especially, aren't strata at all. You buy shares in a company, and the shares carry the right to live in your flat. Lenders treat that differently, and buyers should walk in knowing exactly how.
What company title actually is
Before strata law existed, apartment buildings were commonly owned by a company: the company holds the whole building, and each flat corresponds to a parcel of the company's shares. Buying the flat means buying those shares, which entitle you to occupy your unit under the company's constitution.
You never hold a separate land title for your apartment. The company's rules, set out in its constitution, govern what strata by-laws would otherwise cover: transfers, leasing, renovations, and sometimes who the board must approve as a purchaser.
How that changes the lending
A lender can't take a mortgage over a title that doesn't exist; security over shares is a different legal instrument, and many lenders simply don't offer it. The panel thins accordingly: some decline company title outright, and those that participate typically cap loan-to-value ratios lower than for strata, meaning larger deposits.
Participating lenders will also want the company's constitution reviewed, particularly any board approval rights over buyers and any restrictions on leasing, both of which affect the security's resale flexibility.
Buying company title, eyes open
The price discount is real, and it prices the friction
Company title flats often trade below equivalent strata space, sometimes usefully below. That discount is the market pricing the thinner buyer pool, the larger deposits and the board approvals. For a buyer with the deposit and the patience, it can be genuine value; for a buyer needing high-ratio lending, it is usually the wrong stock.
The buying process differs
Settlement is a share transfer rather than a land title transfer, your conveyancer reviews a constitution rather than strata by-laws, and where the constitution gives the board approval rights over purchasers, that approval becomes part of your timeline. None of this is exotic to professionals who handle it regularly, the key is engaging ones who do.
Where you'll meet it
Company title survives mostly in older blocks across the inner suburbs, it comes up regularly around Marrickville and appears among the older flats of villages like Summer Hill and Petersham. Listings don't always lead with the title type; the contract always states it. Check before you attach.
Conversion to strata
Some company-title buildings eventually convert to strata, which typically lifts values by widening the buyer pool. Conversion needs shareholder consensus, legal work and money, so treat it as a possibility rather than a plan, but a building actively progressing conversion is a different proposition from one that has never discussed it. The minutes will tell you which you're looking at.
Company title questions
How much deposit do I need for a company title flat?
More than for equivalent strata, in most cases. Participating lenders commonly cap company-title lending at lower loan-to-value ratios, which translates to deposits of 20 to 30 per cent or more depending on the lender and the building. The exact number is a routing question, a small set of lenders are genuinely comfortable here, and their caps differ.
Can first home buyers use the 5% Deposit Scheme on company title?
Generally no, scheme lending assumes conventional title, and company-title securities sit outside most participating lenders' scheme criteria. If the scheme is central to your deposit plan, company title is usually the wrong hunting ground, however tempting the price.
What does "board approval" mean for me as a buyer?
Some company constitutions give the directors the right to approve incoming shareholders, a hangover from the era, applied with varying seriousness. Practically it adds a step and occasionally a delay to your purchase, and it is one of the things a participating lender's lawyers will read the constitution for. Your conveyancer should walk you through what your target building's rules actually say.
Is company title a bad buy?
It is a niche buy. The discount compensates for the friction, and buyers who arrive with the deposit, the right professionals and realistic expectations often do well, particularly in buildings progressing toward strata conversion. Buyers who discover the title type at settlement week do not. The difference is entirely in the preparation.
Related guides
General information only, not credit or legal advice. Company title lending is offered by a limited number of lenders on terms that vary and change; constitutional provisions differ by building. Legal review of the specific company's rules is essential before purchase.
Found a company title flat worth the friction?
Charles keeps track of which lenders participate and at what ratios. Bring the listing before you offer, and know your real deposit number.
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