A move to commonhold: what it means for leaseholders

The government’s draft Commonhold and Leasehold Reform Bill represents one of the most significant changes to flat ownership law in England and Wales in many generations. The draft legislation signals a clear direction of travel: moving away from the traditional leasehold system and towards commonhold as the default form of ownership for flats.

For many consumers, commonhold is still a relatively unfamiliar concept. However, the model offers several important advantages that address some of the structural issues that have long existed within leasehold ownership.

Under a commonhold system, flat owners hold the freehold of their individual homes and collectively manage the building through a commonhold association. This removes the traditional landlord-tenant relationship that sits at the heart of leasehold arrangements. Instead, the people who live in the building have a direct role in decisions about its management, maintenance and long-term future.

This change in structure has several potential benefits. Commonhold provides a clearer and more transparent system of ownership, removing the complexities associated with lease terms and diminishing lease lengths. It also allows residents to collectively agree improvements to their buildings over time, whether that involves energy efficiency upgrades, new infrastructure such as EV charging, or wider development of the site.

The draft Bill introduces several reforms designed to make commonhold more practical and accessible. One of the most significant is the proposal to reduce the threshold required for existing leasehold buildings to convert to commonhold. Historically, conversion needed unanimous agreement from leaseholders, which proved to be a major barrier. The draft legislation lowers this requirement to a majority of qualifying leaseholders, making conversion a far more achievable option.

The Bill also modernises the governance framework for commonhold developments. Changes to the Commonhold Community Statement (CCS) and new financial provisions are intended to provide greater flexibility and resilience for buildings managed under the commonhold model.

While these reforms address many of the barriers that have limited commonhold’s adoption in the past, the success of the system will ultimately depend on how well it works for the people who live in these buildings.

The model of collective responsibility will involve unit holders taking on roles similar to company directors, helping to oversee how their building is run. For many homeowners, this represents a new level of involvement in the governance of their property.

Ensuring that consumers understand how the system works – and what their rights and responsibilities are – will therefore be an important part of making the transition successful.

Clear, accessible guidance and support will be essential to help people understand what commonhold means in practice. This includes explaining how commonhold associations operate, how decisions are made, and how residents can participate effectively in managing their building. Supporting consumers to understand these processes will help build confidence in the new framework.

As with any major reform, the transition from leasehold to commonhold will require careful implementation. Issues such as building safety liabilities on conversion, lender engagement and the treatment of non-participating leaseholders will need clear and practical solutions.

However, the draft Bill represents an important step toward a different model of flat ownership – one that places residents at the centre of how their buildings are managed.

LEASE expects both the primary legislation and the supporting secondary legislation that will allow the development of newbuild commonhold and the conversion of existing sites to commonhold to be completed before the next election.

The government has launched a consultation, setting out its proposed approach to introducing a ban on the use of leasehold for new flats so that the reformed commonhold model can be the default tenure for new flats.

The consultation questions relate to scope, exemptions, timings, transitional arrangements, and the wider commonhold legal framework.

The consultation will run until 24 April 2026, and views can be sent online or via email to [email protected].