What is a Company Share Apartment? (And Can You Get a Mortgage on One?)
You’ve been scrolling through property listings and finally found it—a stunning, 1930s character apartment right in the city. It’s got high ceilings, beautiful windows, and the price tag actually looks surprisingly reasonable.
But then you scroll down to the property details and spot two words that bring your excitement to a sudden halt: Company Share.
If you have tried to get a mortgage on one of these, you might have already discovered that banks view them very differently from a standard house. Here is a plain-English look at how company share properties actually work, why lenders get nervous about them, and how you might still be able to get the keys.
A Quick History Lesson: Before Unit Titles Existed
To understand company shares, it helps to know why they were created in the first place.
Before the Unit Titles Act came into play in the 1970s, New Zealand property law didn't really have a neat way to divide up a single building so multiple people could own different parts of it. The clever workaround at the time was to form a company to own the whole building, and then sell shares in that company to the residents.
That is exactly why you will almost always find this ownership structure in those gorgeous, older character buildings—like the classic Art Deco blocks from the 1920s to the 1960s in Wellington and Auckland.
You Don't Actually Own the Apartment
This is the biggest hurdle to wrap your head around. When you buy a standard freehold home or a modern unit title, your name goes on the official property title. You own the bricks and mortar.
With a company share, a registered company owns the entire building and the land it sits on.
When you "buy" into the building, you aren't actually buying real estate. What you are buying is a parcel of shares in that company. Those shares come with an "Occupation Licence," which is the legal document that gives you the exclusive right to live in your specific flat.
The Rules: Meet the Board of Directors
Because the building is owned by a company, it is run by a Board of Directors (who are usually just the other people living in the building).
When you buy in, you are entering into a close-knit financial community. Because of this, the Board often holds a lot of power over how the building operates and who gets to join the community.
The Common Downsides (What to Watch Out For)
Because of this unique legal structure and the power of the Board, there are a few distinct drawbacks you might want to consider before putting an offer in:
The Board Interview & Vetting: In a normal property sale, if you have the money, the house is yours. With a company share, the Board of Directors usually has the right to approve or decline you as a purchaser. You might have to pass an interview, and they could potentially say "no" if they feel you aren't the right fit for the building.
Strict Rules on Pets and People: Company share buildings are famous for having very specific, sometimes old-school house rules. You might find there is a blanket ban on pets (even a goldfish might need approval!), or strict limits on who can actually live in the unit with you, including how long guests are allowed to stay.
The "No Renting" Rule: Many company share buildings explicitly state that the apartments must be owner-occupied. If your life circumstances change and you need to move to another city, you often cannot keep the apartment as a rental investment.
No "Unit Titles Act" Protection: Modern apartments are heavily regulated by the Unit Titles Act, which forces Body Corporates to disclose long-term maintenance plans and structural issues to you before you buy. Company share properties are completely exempt from these disclosure laws. You and your solicitor will need to dig much deeper into the company’s meeting minutes to ensure the building doesn't have hidden maintenance problems.
Renovation Roadblocks: Want to knock down a wall to open up the kitchen or install a heat pump? You might need explicit permission from the Board before you even pick up a hammer.
A Smaller Pool of Future Buyers: Because getting a mortgage is harder (and KiwiSaver is often off the table), the pool of people who could actually afford to buy your apartment when you eventually want to sell is much smaller. They can sometimes take a little longer to sell on the open market.
Slower Capital Growth: Historically, because of the strict rules and financing hurdles, the value of company share apartments might not grow quite as fast as their freehold or unit-title equivalents.
The Mortgage Hurdle (Why Banks Get Nervous)
If you have taken this property to your bank, you may have been met with a swift "no," or been asked for a massive deposit.
Because you are buying shares and not a physical property, lenders look at the security very differently. If someone stops paying their mortgage on a normal house, the bank can step in and sell the property to recover their money. With a company share, the bank would have to try and sell shares in a private company, which is legally much messier and requires dealing with the Board of Directors.
Because of this added risk, banks are incredibly cautious. You might find that:
Some banks simply won't lend on company share properties at all.
The banks that do lend on them might require a much larger deposit—often between 25% and 50%.
Registered valuations are more commonly requested (although not all banks in all situations) and the market value can be harder to estimate without this.
The Game Changer: Registered vs Unregistered Licences
If you are looking at buying a company share, one of the very first questions you (or your solicitor) should ask the agent is: "Is the Occupation Licence registered or unregistered?"
This single detail can completely change how a bank views your application.
When we talk about "registered," we don't mean the shares themselves. We mean whether your Occupation Licence (the document that gives you the right to live there) is officially registered on the public land title with Land Information New Zealand (LINZ), or if it's just a private contract sitting in the company’s filing cabinet.
Here is why lenders care so much about this distinction:
Registered Licences: If the licence is registered on the land title, the bank can officially register their mortgage against your legal right to occupy the apartment. This gives the bank a much stronger, tangible level of security. While you still might need a larger deposit than a standard house, mainstream banks are generally much more comfortable lending on a registered company share.
Unregistered Licences: If the licence is unregistered, it is purely a private agreement between you and the company. The bank cannot register a traditional mortgage against the property title. Instead, they have to take security over the shares themselves. Because selling shares to recover money is a legal headache for a bank, many lenders will completely refuse to lend on unregistered company shares, they may require a higher deposit, or they may require the body corp signs documents to give the bank a financial hold over the mortgaged shares. Some body corps will and some won’t accept this.
If you discover the apartment you love has an unregistered licence, it isn't necessarily a dealbreaker, but it does mean your financing options could be significantly narrower. This is exactly where having an adviser who knows the specific policies of different lenders becomes invaluable.
The KiwiSaver Catch: Why Your Funds Might Be Off-Limits
If you were hoping to use your KiwiSaver to help pull together that larger deposit, there is another significant hurdle you might face.
Under the official KiwiSaver rules, to make a first-home withdrawal, you usually must be purchasing an "estate in land"—which is the legal term for actual real estate.
Because buying a company share means you are technically buying shares in a company rather than the land itself, it often doesn't meet the strict legal definition required by your KiwiSaver provider. This could mean your KiwiSaver funds might be completely off-limits for this type of purchase, meaning you would need to rely entirely on cash savings or equity from another property to fund your deposit.
Who Might a Company Share Actually Suit?
With all those hurdles, who actually buys them? Because of their unique setup and strict rules, company share apartments can actually be the perfect fit for a few niche situations:
The Pre-Retiree Downsizer: If you are nearing retirement, have sold the large family home, and are sitting on a good chunk of equity, a company share could be brilliant. You might have enough to buy outright or easily cover the larger deposit. Plus, because of those strict "owner-occupier only" rules, you are almost guaranteed a quiet, secure building full of other homeowners—no loud student rental flats next door! It can be an ideal way to secure a peaceful, paid-off home for your retirement years.
The City Professional: If you have a strong income, a healthy deposit, and want a character-filled weekday pad right in the city, the community feel of a company share might suit you perfectly.
The Community Seeker: Because the Board vets who moves in, these buildings often foster a fantastic, old-school sense of community where neighbours actually know and look out for one another.
How We Can Help You Navigate It
Falling in love with a company share apartment doesn't mean you have to give up on it, but it does mean you might need a specialist strategy.
Because we work with lenders across the market every single day, we know exactly which banks might view company shares more favourably, what specific criteria they are looking for, and how to structure your application to give you the best possible chance of a "yes."
If you have found a character apartment and want to know if you can make the numbers work, don't try to navigate the banking maze alone.
