#73806
JulieMcLean
Strataguru

    I assume you mean you a stratum with a service company or a company title.

    Both are formed under the old Companies Act Cth (now Corporations Act Cth). When formed they have what is called Articles of Association or Memorandum, which sets out how decisions are made and who can make them.  So, you would need to check your specific deed to see how many directors are required to make a decision. It’s often just a few directors required to make decisions on behalf of the company for certain activities. If there is a carpark & lease to all units, not as much as a problem if someone will miss out. Their activities are regulated like any other company.

    If not all benefit from a carpark a company may need to consider that those who do benefit pay for the privilege. If the leases are created before conversion, then the lease needs to deal with the assignment/transfer of the parties, to allow for the change in entity. When converting from Stratum to Strata, the existing leases may just transfer (if worded properly).

    You will need to obtain legal advice to draw up the leases, but make sure the lawyer is properly briefed with the intention to convert to strata in the future. You will definitely need legal advice for the conversion from stratum to strata.

    This is a great resource for Stratum & Company Title Understanding Company Title Requirements – JFM Andreyev (jfmlaw.com.au) The legal company is based in NSW, but as Companies fall under Commonwealth legislation, it doesn’t matter where you are based, except perhaps for the neighbourhood disputes chapter, some states (like Vic) have implemented local solutions.

    Hope that helps.