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So what is “Commonhold”?

The Law Society has welcomed the government’s plans to reform the rights of home owners. The recent Law Commission Report proposed legislation promising to “ban” the creation of leasehold houses and ground rents in new leases created after its introduction.
The reforms promise a system of freehold purchases for house owners and extension of lease terms which will be simplified and transparent. The reforms further look to revive “commonhold” originally introduced in 2004 but with little take up by developers. Fewer than 20 commonhold developments have been established in England and Wales since the commonhold legislation came into force
So what is “Commonhold”? Popular in many countries as an alternative to leasehold. The Unit Owner owns the Unit outright. Thus no lease term to diminish…. And no landlord to threaten forfeiture for rent arrears or breach – goal…
Unlike practices in other countries across the world property owners of residential flats and sometimes houses in England and Wales continue to hold leasehold interests with diminishing terms of years and with landlords controlling management. Commonhold enables the home owners’ to take control of the development and to create their own regulations governing the day to day use of the dwellings (to be called “Units”) on the site. There is to be a statutory Commonhold Community Statement but supplemented by “Local Rules” designed by the unit holders. Forfeiture will become a thing of the past. The intention is to place the Unit Holders in control. To allow them, subject to satisfaction of conditions, to make their own rules and to control the level of service charges.
Not without its possible quirks, The Law Commission are keen to see the rival (if it ever got of ground) of the Commonhold System in the UK.
Although we look forward to the introduction of reforms which look to simplify the current systems in respect of freehold acquisitions, lease extensions and the more radical changes in the introduction of Commonhold we have little indication of the timing of their passage through parliament. We therefore watch and wait …..
For more information follow the links below.
https://www.gov.uk/government/news/government-reforms-make-it-easier-and-cheaper-for-leaseholders-to-buy-their-homes

Millions of leaseholders to benefit from Law Commission reforms

If you have a question regarding leasehold reform, please contact us on 01543 442100 or email Linda Ball on lb@adcocks.com and we will be happy to help.

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