Leasehold, company title and shared ownership: can an unusual title secure a first mortgage?

Most property in Australia is held in one of two familiar ways: a freehold house or block on its own title, or a strata unit with its own lot. Both make straightforward security for a private first mortgage. But plenty of business owners hold property in less familiar ways, often without realising it matters until a lender asks.

A Canberra office on a 99-year Crown lease. A harbourside unit held as shares in a company. Half a holiday house owned with a brother. A family home still in a late parent’s name. A lot in a new estate that’s been paid for but doesn’t have a title yet. Each of these can affect whether, and how, the property can secure a first mortgage. This guide walks through them one at a time.

Why does the type of title matter to a first mortgage?

Because a registered mortgage has to be registered against something. Australia’s land registries record who owns each parcel of land and what interests sit over it. In New South Wales, the Registrar General calls the Torrens register the “single source of truth” for ownership and interests in land, and other states work the same way. A first mortgage is registered on that record against a specific title or lease.

If there’s no title in the borrower’s name to register against, or the title is shared with people who aren’t signing, the lender can’t take the clean first-ranking position that makes a private first mortgage work. The question for each unusual title is simply: can a mortgage be registered over the whole property, by everyone who owns it?

How the property is held	Can it secure a first mortgage?	What usually needs to happen
Freehold title	Yes	Nothing unusual
Strata lot	Yes	Levy and building information
ACT Crown lease (granted)	Yes	Confirm use matches the lease purpose
Queensland state lease	Case by case	Check the lease terms and remaining term
Company title unit	Rarely	Usually offer other security
Part share as tenant in common	Not on its own	All co-owners sign over the whole property
Property in a deceased estate	Not until transferred	Executor or beneficiaries become registered owners
Lot in an unregistered subdivision	Not yet	Plan registers and title issues

How does ACT leasehold work for a business loan?

Smoothly, in most cases. The ACT government puts it simply: “Leasehold is ACT’s system of land tenure.” Almost all land in the territory is held under Crown leases rather than freehold, so lenders active in Canberra see them every day. A residential Crown lease usually runs for 99 years.

Two details matter. First, the lease has to have been granted or transferred to you. The ACT government notes that until then you can’t become the registered proprietor, and you “may not be able to borrow money until the lease is available”. Second, the property should be used for a purpose its lease allows, because the ACT says leased land and buildings can only be used for authorised purposes. A lender will want to see that the current use fits. Our Canberra private lender page covers local settlement detail.

What about Queensland state leases?

Some land in Queensland, particularly rural and coastal holdings, is held under a state lease rather than freehold. Titles Queensland’s search products cover lessees of a state lease alongside freehold owners, so these leases are recorded and searchable.

Whether a state lease works as security depends on its terms: the remaining term, any conditions on use and transfer, and whether the lease can be mortgaged without further approvals. Assessment is case by case. If your property is a state lease, mention it on the first call and have the lease details ready.

Why is company title so difficult?

Company title is an older way of owning apartments, still found in some established inner-city buildings. Instead of owning a lot on its own title, you own shares in a company that owns the whole building, and those shares give you the right to occupy a particular unit.

The difficulty for a private first mortgage is that there’s no separate title for your unit. You can’t register a standard mortgage over a lot you don’t hold. Lenders who accept company title use different security arrangements and usually need the company’s approval under its constitution, which adds time and uncertainty.

For a business loan, the practical answer is often to offer a different property as security and leave the company title unit out of it. If it’s the only property you own, tell us early so we can say plainly whether there’s a path.

Can you borrow against your share of a property?

Rarely on its own. Many properties are owned by two or more people as tenants in common, each with a defined share. In theory a share can be mortgaged. In practice, a lender lending against half a house would have to sell half a house if things went wrong, and there are very few buyers for that.

The workable route is for every registered owner to sign the mortgage over the whole property. That brings in people who may not be part of your business, so they should take independent legal advice and understand they’re putting their share on the line. Our page on third-party security explains how that’s handled. If the co-owner is a company or trust, see company or trust-owned property.

What if the property is in a deceased estate?

This comes up more than you’d think: a family home or investment property still in a parent’s name, with the business owner as executor or beneficiary.

The title has to be brought up to date before a lender can take a mortgage. Queensland’s eConveyancing mandate, for example, includes the transmission-by-death form among the instruments that must be lodged electronically, which is one of the ways an estate’s representative becomes recorded on the title. Until a change like that is registered, the title may still show the deceased owner, and a new mortgage can’t be registered by the people who will inherit.

The estate’s solicitor can tell you where the process is up to. Once the executor or beneficiaries are recorded, the property can usually secure a loan like any other, provided the people on the title have the power to borrow and everyone needed signs.

What about a lot that doesn’t have a title yet?

If you’ve bought a lot in a new subdivision that hasn’t registered, or a unit off the plan, you don’t yet hold a title in your name. There’s nothing for a mortgage to be registered against until the plan registers, the title issues and your purchase settles. Our page on first mortgages over vacant land covers land once the title is in hand.

Illustrative example: two titles, one plan

A Canberra architecture practice needs $300k to fund a partner’s exit. One director owns a company title unit in Sydney outright; the other co-owns a Belconnen townhouse on an ACT Crown lease with her husband, with $180k owing to a bank.

Illustrative: the company title unit is set aside because there’s no separate title to mortgage. The townhouse is assessed at around $850k. Both the director and her husband sign a first mortgage of $500k over the whole property, which pays out the bank’s $180k, funds the $300k exit and covers costs. Her husband takes independent legal advice before signing. Interest is capitalised for the first 6 months, and the exit is a refinance once the practice’s restructured accounts are lodged. Figures are illustrative only.

Not sure how your property is held? Find out before it slows you down

Unusual titles aren’t a reason to give up. They’re a reason to raise the question early, so the right security is chosen from the start rather than discovered halfway through.

Our loan check takes about 60 seconds and won’t touch your credit file. It comes to one direct lender, not a pile of lenders who all call at once. A specialist reads it, looks at how your property is held, and calls you to talk through the options. Please tell us accurately how the property is owned, by whom and with what owing, so we can point you to the right path the first time.

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