All you want to know about company title conversion

1. Conversion of Company Title Schemes
to Strata Title
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2. Why should we convert to strata
title?
• Own a subdivision of airspace
above the ground on separate
title
• Can sell, mortgage, or lease
the lot itself, without the
cumbersome share/unit
procedure
• Ready made dispute
resolution procedure through
legislation including mediation
and the Tribunal
• Having strata title to land
means a higher market value
than company title
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3. What are some disadvantages of
conversion?
• Can not decide who will
be permitted as an
occupant
• Land Tax and Stamp
Duty may apply
• Higher rate liability
(water, electricity)
• May be capital gains
liability on conversion
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4. Power to Convert
• The company must have
the power to convert
• If no power, the company
must change the
Constitution to provide the
necessary power
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5. Decision to Convert
• Canvass the opinion of shareholders
• Put forward a proposed motion to investigate conversion
option:
“THAT this meeting approves conversion of the company
home unit scheme to strata title and that it supports the
directors of the company in their proposed investigation of
such a course of action.”
• Unanimous approval is commonly required. This is specified
in the Articles of Association and requires an Annual or
Special General Meeting.
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6. Matters Affecting Conversion
• Corporate Issues
• Local Government
Requirements
• Survey Matters
• Mortgagees of shares
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7. Steps to Conversion
Company Consent Requirements
•
Altering the Memorandum of Association to allow
conversion (commonly requires special resolution
and notification must be provided to ASIC within
21 days of passing the special resolution)
•
Formal Decision to Convert
•
Consent of all shareholders in writing
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8. Steps to Conversion continued…
Town Planning and Strata Plan Preparation
• Consult with a Town Planner at the pre-development
application level
• Brief surveyor to prepare Strata Plan and measure the lots
in compliance with Planning Instruments (LEP and DCP)
• Surveyor Plans and Report to be submitted to local council
for Development Application (consent may be required for
additional items as part of DA process)
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9. Steps to Conversion continued…
• Registration at Land
Titles Office
• Transfer of lots to
shareholders in the
company (Stamp duty
payable on transfer)
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10. Winding Up the Company
• Once lots are transferred,
shareholders must
commence a voluntary
winding up of company.
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11. 323 Beaconsfield Pde – Case Study
• 18 lots converted to
Strata Title;
• 12 mortgagees; 2
caveators and 1 dead
owner;
• Re-alignment of
boundaries of car
parking spaces;
• Increase in value of
$80,000 per unit*
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