February 2018
The Law Commission is seeking views on why commonhold failed to gain popularity and what amendments can be made to current legislation to provide a workable alternative to leasehold.
The publication of ‘Commonhold: A Call for Evidence’ follows December’s announcement by the Law Commission that residential leasehold will be one of the project areas included in its 13th Programme of Law Reform.
As part of this call for evidence, the Law Commission is seeking views on three themes:
- What the difficulties in creating or converting to commonhold are;
- What issues make commonhold unattractive to homeowners; and
- What issues make commonhold unattractive in the wider property sector
Later this year the Law Commission will publish a detailed consultation paper setting out options to address the issues raised in response to this call for evidence.
Commonhold was introduced in 2004 as an alternative to the long leasehold system. It allows freehold ownership of individual flats by ‘unit-holders’. Ownership is not limited by time as it is with a lease. The rest of the building or estate forming the commonhold is owned and managed jointly by the unit-holders through a ‘commonhold association’.
There are a number of advantages to commonhold, such as:
- Ownership doesn’t expire, therefore the costly procedure of lease extension does not arise;
- Management responsibility rests exclusively with the commonhold association, made up of the unit-holders; and
- Very high level of standardised documentation and forms. Unit-holders, managing a commonhold through the commonhold association, do not have the problem of dealing with differing leases or inadequate company structures.
However, since its introduction, fewer than 20 commonhold developments have been created.
The call for evidence lasts for 8 weeks – from 22 February 2018 until 19 April 2018. An optional response form is available here.
Alternatively, comments may be sent:
By email to: propertyandtrust@lawcommission.gov.uk
By post to: Rachel Preston, Law Commission, 1st Floor, Tower, 52 Queen Anne’s Gate, London, SW1H 9AG.
Tel: 020 3334 5333 / Fax: 020 3334 0201
If you send your comments by post, it would be helpful if, whenever possible, you could also send them electronically.