Company title is a category of land ownership whereby a company has title to the land and owns the units on that land. Shareholders who have shares in the company have exclusive use and occupation of their flat in accordance with The Company’s Constitution. Therefore, this means that shareholders are not actually the owners of the land, they just have exclusive occupation.
Companies are legally regulated through the Corporations Act 2001 (Cth) and its constitutions. Other legislative material include Work Health and Safety Act 2001 (NSW), Environmental Planning and Assessment Act 1979 (NSW) and Part 3 Local Court Act 2007 (NSW).
The Constitution is a piece of legislative material which regulates the company’s internal management. A Constitution usually consists of:
- Shares that have been issued within the company and associated flats
- Specification of the rights of the shareholders and explanation of their rights to exclusive use and occupation of the flat
- Outlining the Company’s ability to raise levies (tax, fine or fee) and charge interest for any unpaid levies
- Outlining the Company’s powers, what they are entitled to do. E.g enter flats for a specific purpose
- Outlining the procedure for purchasing and selling shares in the company
- Outlining Company policy regarding how to maintain the property
- Outlining the procedure for letting or subletting of flats
- Outlining the procedure for company meetings and elections for office holders
- Outlining the duties of shareholders and directors
- Outlining that the directors have the ability to make, amend and revoke house rules.
House Rules are often referred to as ‘by-laws’ or ‘regulations’ which outlines building management and conduct of its residents on a daily basis. These regulations can change or can be voted on by shareholders to make an amendment.
House rules usually consists of:
- Outlining the use and maintenance of the flats E.g. maximum number of people residing in a flat at one time, whether pets are allowed, approval for renovations, reducing noise.
- Outlining the use and maintenance of common property E.g. renovations and maintenance work on common property to ensure appearance of property is maintained.
- Outlining the procedure with selling and letting of flats. E.g. conducting interviews for new shareholders, whether short term letting (AirBnB) is allowed
- Outlining administrative matters. E.g. Mail delivery, Provision of moving in and out of buildings, allocating common property storage facilities
- Outlining safety E.g. security, fire alarms, fire extinguishers, keys)
- Limiting the keys available to residents
The Company has a responsibility to common property which are certain parts of the property whereby other parts are the shareholders responsibility. Companies should have a set of rules which outlines any renovations or maintenance rules. These rules can ensure or avoid any disputes arising in regards to renovating or maintaining the company. By having these rules, it means not needing to change the constitution.
If you need further clarification on company title or think you have an outdated Constitution for your Company Title Building, call JFMLAW on (02) 9199 8597 for assistance.