Commonhold - A New Beginning

Originally published October 2004

On 27 September 2004 the provisions of the Commonhold and Leasehold Reform Act 2002 introducing Commonhold commenced.

Introduction

Commonhold is not a new estate or interest in land, but a type of freehold created out of registered land. It is an alternative to the unpopular leasehold system.

It is suitable for houses, mixed use and commercial developments and it is likely to be used at least initially on new developments.

The owners of each unit within a development are themselves in control of the development, without a landlord or other party able to make decisions about how the development is run.

The owners of commonhold units may not be restricted from selling or mortgaging their units. Restrictions on the ability of owners of residential units to lease their units apply.

Blocks of flats may also convert to Commonhold provided the statutory procedures are followed.

Main Provisions

Individual freehold properties or units will form part of the commonhold.

Owners of the units will be known as "unit holders".

The common parts of a development not forming part of a unit, for example, the main structure of a building, the internal and external common parts will be owned and managed by a limited company, called the Commonhold Association (CA).

Membership of the CA is limited to the unit holders within the commonhold. The CA must be a private limited company, limited by guarantee.

Unit holders will have two interests, the freehold of a unit and an interest in the ownership and management of the common parts through membership of the CA.

The commonhold will be managed by the CA in accordance with the Commonhold Community Statement (CCS) a document which defines the extent of the property within the commonhold and contains details of the rights and duties of the CA and unit holders and dispute resolution procedures.

RadcliffesLeBrasseur

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

The form and content of the CCS and the Memorandum & Articles of Association of the CA are regulated by the Commonhold Regulations 2004.

The commonhold must be registered at the Land Registry and the CCS and the CA will be available for public inspection.

Only limited amendments to a CCS are permitted. Permitted amendments or "local rules" must be specific to that commonhold.

Land that cannot be Commonhold

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