Commercial Commonhold Schemes

Originally published August 2004

The Government has announced that Commonhold schemes can be set up from 27 September 2004.

Developers will now be thinking about whether a Commonhold scheme will be suitable for their proposed developments.

Commonhold schemes will be far simpler to set up than conventional methods of long leasehold or freehold sales of part. Like the Sydney waterfront office/retail/restaurant development pictured above, Commonhold is flexible, not only in the residential context, but also in mixed - use developments, retail parks and industrial estates.

Will a Commonhold development be worthwhile investing my time and money in?

Commonhold is a new way for developers to create a scheme involving the joint ownership of property. It will take time for others in the property industry to adjust to the new way of owning and developing property. However, the structure and documents of Commonhold schemes will soon become familiar within the marketplace.

Consider also the popularity of Commonhold type schemes in other jurisdictions. The Australian equivalent of Commonhold has been in operation for over 30 years. Today, the number of Commonhold type schemes in New South Wales alone is 65,000, with on average 10 new schemes being created every day.

If you are thinking about creating a Commonhold scheme (or converting a conventional scheme to Commonhold), come and talk to us. We can use the flexibility of Commonhold to create a scheme which can meet your requirements.

Our Expertise

Ian Barker is a Property Partner specialising in commercial property development. Susan Samuel is a Property Associate, admitted to practice in both England and in her native jurisdiction of New South Wales. In New South Wales, Susan acted for property developers, property funds and lenders in creating and managing strata (the equivalent of Commonhold) schemes. Ian and Susan lead the Commonhold team at Pinsents.

'The major benefit for developers is that when a Commonhold scheme is set up, all of the units are subject to standard terms - buyers can't tinker with them as they would with long leases.'

How Commonhold Works

Commonhold was first introduced to us by The Commonhold and Leasehold Reform Act 2002 ('the Act') in May 2002.

Commonhold gives property developers the ability to create new developments with freehold ownership of, what is in effect, air space! There will also be a proper permanent structure for dealing with the common parts.

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