What is a Company Share Apartment? (And Can You Get a Mortgage on One?)
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You have 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 before, 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, standardized 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 private company to own the entire 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 built between the 1920s and 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 apartment, your name goes on the official property title. You legally own the bricks and mortar.
With a company share, a registered company owns the entire building and the land it sits on.
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 Quirks (What to Watch Out For)
Because of this unique legal structure and the power of the Board, there are a few distinct quirks you should 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 a casual 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 in their constitution 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 and financial accounts 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 will likely need explicit written permission from the Board before you even pick up a hammer.
The Mortgage Hurdle (Why Banks Get Nervous)
If you have taken this property to your own bank, you may have been met with a swift "no," or been asked for a massive deposit.
Because you are buying shares and not physical property, lenders look at the security very differently. If someone stops paying their mortgage on a normal house, the bank can legally 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:
- Some banks simply won't lend on company share properties at all.
- The banks that do lend on them typically require a much larger deposit—often between 25% and 50%.
Registered vs Unregistered Licences
When we talk about "registered," we don't mean the shares themselves. We mean whether your Occupation Licence 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.
- 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 massive legal headache for a bank, many lenders will completely refuse to lend on unregistered company shares. The banks that do may require the company's Board of Directors to sign specific legal documents giving the bank a financial hold over the mortgaged shares—which some Boards will agree to, and some absolutely won't.
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.
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 legal hurdle you will face.
Under the official KiwiSaver Act rules, to make a first-home withdrawal, you generally must be purchasing an "estate in land"—which is the legal term for actual real estate.
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 specific situations:
- The Pre-Retiree Downsizer: If you are nearing retirement, have sold the large family home, and are sitting on a good chunk of cash 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 cash 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 need a specialist strategy.
Because we work with lenders across the market every single day, we know exactly which banks 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.
