Community Title

Hi All,

Have found some potential buys that have community title.

But I've never dealt with this before and am concerned about the finance..

I know torrens and strata are fine for LMI, and I know company title is NOT fine.

But in terms of finance where does community title come in, is it closer to company title or strata title?

How much % will the banks lend up to?

Unfortunately a search is not yielding the answers I want..

Thanks!

Not an issue, treat it as strata/torrens.

Some lenders will want a solicitor to look over the community agreement and charge you for the privilege, but you can just avoid these lenders if need be.

Thanks CJay,

Also this is a kind of serviced apartment that you can lease back - but you are allowed to owner occupy or rent on a normal lease.

When banks get fussy about serviced apartments - what is it that triggers this?
Is it company title ones only, or is it based on the strata/community title by-laws and ability to live in the property?

Or is it based on what the valuer says about the "style" of property?

As a valuer with experience in this specific segment it will depend on a number of factors; the length of management agreement, whether the apartment can be taken out of the rental pool, and if so, with how much notice (3,6,12 months etc), and whether permanent occupation is a permitted use.

A lot also has to do with the floorplan and size of the apartment. If it's a 30sqm bedsit, then a valuer is likely to comment as to the lack of suitability for long term occupation. If it's a proper one bedroom apartment of 50sqm then it's probably not going to be an issue generally speaking.

A lot of lenders like to see 50sqm as the minimum size for an apartment, but that would need confirmation from some of the forum members with a lending background.

Be careful to have a good look at the body corporate fees - they can hurt cash-flow considerably.

Great info thanks.

It's a 2 bedroom and can be leased back to the Oaks but comes with no current lease.

I could value it based on a long term lease and change later to short term if I wanted.

So you think is ok at 90% LMI?