Converting Company Title to Strata Title (NSW Guide)

Converting a company title building to a strata title scheme is a significant legal, financial and governance transformation. It changes the ownership structure from share-based occupancy under the Corporations Act 2001 (Cth) to individual lot ownership under NSW strata legislation, with registration of a strata plan under the NSW land titles system.

In practical terms, shareholders transition from owning shares in a company that controls the building to owning a registered strata lot under the Torrens Title system, with an Owners Corporation responsible for managing common property.

This process is complex, often costly, and requires careful legal, surveying, financial and governance coordination.

Why Conversion Is Considered

Company title buildings may consider conversion to strata title for a range of structural and market reasons, including:

• Improved clarity of individual ownership rights.
• Greater ease of financing and lending approval.
• Increased market liquidity and buyer confidence.
• Simplified governance under strata legislation.
• Clear statutory framework for dispute resolution.
• Modernised management structure aligned with current NSW property law.

However, conversion is not undertaken lightly and is only viable where there is strong shareholder agreement and the building can meet the required technical and legal steps.

Key Legal Frameworks

Conversion involves a combination of legal regimes:

• Corporations Act 2001 (Cth) – governs the company structure, shareholder rights and director resolutions.
• Company constitution – sets out internal rules and may need amendment to permit conversion.
• NSW land titling system (NSW Land Registry Services) – governs registration of the new strata plan and issuance of titles.
• Strata legislation framework – applies once the strata scheme is registered.

Each of these must be aligned for conversion to proceed lawfully and successfully.

Typical Requirements for Conversion

While each scheme is different, conversion generally involves several core requirements and stages:

1. Shareholder Approval

Conversion typically requires strong shareholder support. In most cases, unanimous or near-unanimous agreement is necessary, as shareholders’ occupancy and ownership rights are fundamentally altered.

2. Constitutional Review and Amendment

The company constitution must be reviewed to confirm whether it allows conversion. If not, it may need to be amended in accordance with its voting requirements under the Corporations Act.

3. Board and Company Resolutions

The board of directors and shareholders must pass formal resolutions approving the conversion process in accordance with the constitution.

4. Surveying and Strata Plan Preparation

A registered surveyor is engaged to prepare a strata plan, defining lot boundaries and common property in accordance with NSW land titling requirements.

5. Planning and Local Authority Requirements

Depending on the building and development controls, council or planning approvals may be required, particularly where building works or upgrades are necessary to meet strata compliance standards.

6. Mortgagee and Lender Consent

Where units are mortgaged, lender consent is generally required before conversion proceeds.

7. Lodgement and Registration

Once approved, the strata plan is lodged with NSW Land Registry Services for registration, creating individual lot titles.

8. Transfer of Ownership

Shares are converted into strata ownership, and title is transferred to individual lot owners, typically in accordance with the approved conversion structure.

9. Wind-up or Restructure of Company

Following registration, the company structure is usually wound down or restructured, with governance transitioning to an Owners Corporation.

Key Challenges in Conversion

Company title conversion is often constrained by practical and financial realities, including:

• Achieving required shareholder consensus.
• Cost of legal, surveying and building works.
• Potential requirement for fire safety or compliance upgrades.
• Lender participation and mortgage restructuring.
• Complex valuation and share-to-lot entitlement alignment.
• Risk of disputes between shareholders during transition.

These challenges mean many schemes do not proceed to conversion even where it is technically possible.

Financial and Market Considerations

Independent industry analysis and market commentary consistently note that strata title is generally easier to finance and transact than company title, and may improve marketability in many segments.

However, conversion costs can be significant and may be shared between owners, meaning financial feasibility must be carefully assessed before proceeding.

How We Support Company Title Conversions

Strata Real Estate Services supports company title buildings through structured advisory, financial and governance assistance during potential conversion discussions.

Our role includes:

• Governance and procedural guidance aligned with Corporations Act requirements.
• Financial modelling and feasibility assessment (supported by a qualified CPA).
• Coordination with legal advisers, valuers and surveyors.
• Records review and preparation of historical financial documentation.
• Project management support across the conversion process.
• Communication and meeting coordination with shareholders.
• Transition planning from company governance to strata governance.

We also assist schemes in determining whether conversion is appropriate, or whether improved company title management may be a more practical alternative.

A Critical Decision Point for Many Buildings

For many company title schemes, conversion represents a strategic choice between maintaining a legacy ownership structure or transitioning to a modern statutory framework.

There is no universal answer—only a need for informed decision-making based on legal, financial and structural realities.

Our role is to help shareholders and directors understand those realities clearly so they can make confident, well-informed decisions.

Your Building, Our Expertise.

Owners / Shareholders should not consider the above as legal advice, and should seek appropriate independent legal advice.