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Could Commonhold Be The Answer To Escaping Long Leases?

Could Commonhold Be The Answer To Escaping Long Leases?

By Sofy Robertson

Radical plans to expand a little-known and seldom-used system of home ownership called commonhold could see people being able to own their flats outright rather than on long leases.

Under plans put forward by the Law Commission, flat owners would no longer have to deal with landlords, pay ground rent or try to extend their leases. The independent legal reform body proposes to reform the commonhold system as an alternative to residential leasehold.

Introduced in 2001, commonhold allows a person to own a freehold unit, for example a flat within a building, and at the same time be a member of the company that manages the shared areas and buildings.

As opposed to leasehold, owners own their unit outright so the ownership does not run out at a point in the future. Under commonhold legislation, they also do not have a landlord. If a leaseholder breaches the terms of a lease, the landlord can take back the property without paying anything to the leaseholder. There is no risk of this with commonhold.

Despite the clear advantages, fewer than twenty commonhold developments have been created in England and Wales since the law came into force. Among the reasons holding it back from becoming a more widespread practice are the difficulty of converting leases to commonhold, the reluctance of mortgage lenders to provide loans and a lack of flexibility when applied to larger, more complex developments. Despite these difficulties, commonhold ownership is frequently used in several other countries, including the US, Australia and many countries within Europe.

The Law Commission has proposed draft reforms that would remove barriers such as those listed above to the uptake of commonhold. Part of the proposed reform would allow these developments to include residential units as well as commercial units such as shops and restaurants. As well as making it easier to convert from leasehold to commonhold and increasing the confidence of mortgage lenders, the commission aims to provide plans to replace service charges paid to landlords with commonhold contributions to be approved by a majority of those paying them.

The law commissioner in charge of the project, Professor Nick Hopkins, said:

“Commonhold provides a once-in-a-generation opportunity to rethink how we own property in England and Wales and offers homeowners an alternative system to leasehold.

“It involves a culture change, moving away from an ‘us and them’ mindset, towards ‘us and ourselves’. We want to hear what people think of our proposals so we can be sure the commonhold system will work for homeowners and the wider property sector.” (The Times)

Grow would be interested to hear what local businesses and law professionals have to say about the Law Commission’s proposed plans. You can comment on the article, or on social media. Alternatively, you can email your reactions to


Photo by Jace & Afsoon on Unsplash

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