19 Jun 2021

What is Stratum Title, Is It Acceptable Security?

Every business reaches the point where it has expansion needs that it cannot pay on its own. When the business reaches that point, it is necessary to reach out to a financial institution for a business loan.

Among the various property titles is the stratum title. It’s important to distinguish the stratum title from the strata title for those interested in securing a home loan against the property. In both, individuals purchase a flat and shares in the lot. A company manages the lot and maintains it. Plus, they’re responsible for overseeing the lot’s finances.

In the stratum scenario, an individual owns the dwelling they purchased. The individual has the right to purchase shares to own elements known as common property. Common property includes shared stairs, walkways, and gardens. Owners agree to the terms set down by the company. 

Since a stratum titleholder is beholden to the rules set down by the company managing the lot, it takes a little longer to assess it. The property on the title probably has value, but the rules governing the property might be cumbersome. This poses a challenge for the lender in case the applicant fails to follow through on repayments.

Mortgage House takes the time to explore this scenario, among several others, with clients attempting to secure a new mortgage. If this title isn’t a good fit, there could still be other solutions to explore. Our mortgage calculator helps you complete due diligence too.

Stratum Title Conclusion

Mortgage House accepts several property title types as collateral to secure a mortgage, including the stratum title assuming it’s combined with other securities. This title has some details, so our lending specialists and other departments examine them before delivering a final decision. We’re confident that our innovative tools and forward-thinking mindset will deliver a solution that works for all parties.

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