The constitution (formerly called the Memorandum and Articles of Association) of a Company Title building lists the official procedures by which the company conducts the operation of the building.
Each company has a Board of Directors responsible for ensuring that the company is managed for the benefit of the shareholders.
Most Boards appoint an outside Company Secretary responsible for the collection of levies and the day-to-day maintenance and operation of the building. However, there is no obligation on the Board of Directors to appoint an outside manager, and some boards manage their own affairs.
The Board of Directors is responsible for approving new shareholders and if leasing is allowed under the articles, approving tenants who occupy any of the units.
Other information for shareholders
All shareholders in a company title building are entitled to vote at the Annual General Meeting.
Shareholders elect Directors. There is usually a minimum number of directors elected at one time, as specified in the constitution. Even if there is an outside manager, the directors are responsible for the day-to-day management of the building, so the personnel on the Board directly affects you.
Company title home unit buildings also have a set of rules and regulations. Owners who reside in the building as well as tenants and invitees, are bound by those rules.
Some Company Title buildings place restrictions on long-term tenants. Some buildings will allow tenancies for short periods of time (up to one year) while other buildings may not allow tenancies at all.
It is necessary to look carefully at the constitution of the company to find out whether leasing is allowed. This may not be an issue at the time when you buy a unit, but it may be a problem later.
Another area that may be of importance later is what happens when there are disputes between a shareholder and the Board or between shareholders. Always check to see what the situation is in the building you intend to buy into.
Each company title publishes an annual set of accounts. All holders of shares are given a copy of those accounts.