Company Share Flats/Apartments are a new ownership structure I though of, then found was a real thing.
Instead of taking title to the property, you are purchasing shares in a company. The company owns the property and as a shareholder you are granted rights to live there.
The building is managed by the directors of the company, being a number of the owners. All owners are shareholders in the company.
The company will have its own constitution which outlines the rights and obligations of shareholder occupants.
Shareholders pay operating expenses to the company. These can include rates, insurance, maintenance and operating costs.
I can see the advantages of this.
- There could be a low threshold for buying in. Then, through an occupier agreement, the occupant agrees to purchase shares at a predetermined rate up to their proportion of the company. For example if the development was worth $1million and there were 10 units, each person could buy up to $100,000 of equity.
- The individual insurance could be lower, due to the scale of the development.
- Lots of the multiple things required in individual titles (meters, rubbish bins etc.) could be eliminated.
- The cost of moving could be reduced or eliminated. The occupant would simply swap shares for money with the company and move out.
- It would eliminate the need for Banks, Lawyers, Real Estate Agents, Valuers and Investors looking for a quick return.
Possible Disadvantages
- It would involve an occupation agreement similar to a unit title development that could be more onerous. Eg. No pets, naked flames, renting etc.
- Would probably need an interview with the directors to get in.
- Possibly more risk, as it would be regulated by the Companies Act, not Banking regulations.
- The developer would have to take on a longer return period. Possibly 10-20 years instead of the immediate return when selling as individual titles.