Reinvigorating Commonhold

Suggested response for community-led housing groups on the consultation paper - submissions due by 10 March

The Law Commission has issued a formal consultation paper on commonhold to which you will no doubt respond "what is commonhold?". Commonhold was introduced in 2002 as an alternative to leasehold and was expected to be the next big thing. It allowed for the creation of individual freehold units, with common parts owned communally. It offers several advantages over leasehold, but the original legislation contained a number of perceived problems that meant it was never taken up in practice.

As a result, only a handful of commonhold properties have been created since 2002 and the Law Commission is looking to address the issues, or assumed issues, that prevented the largescale take-up originally envisaged. This is being done in conjunction with the work on the proposed ban on new leaseholds and the simplification of enfranchisement. It seems the government is looking to update property law for the twenty first century!

Commonhold ought to be a good option for community-led housing (CLH) groups as it allows for property to be held communally. However, we think that without greater flexibility on the governance structures, it may not be a workable option for all CLH groups. We have prepared a suggested response and anyone who would like to respond is welcome to send in a similar response. Comments should be sent to propertyandtrust@lawcommission.gov.uk

Consultation question

Response

Question 36

We provisionally propose that event fees should be prohibited within commonhold except for any specific circumstances expressly permitted by statute.

Community-led housing (CLH) groups some times make use of events fees, not to profiteer, but to put money back into the group so that the group can provide financial support/affordable housing to its members.

It would be a shame to prevent this public good because of a blanket ban. Please see our response to question 68 as to why we think CLH groups should be an exception to the proposed ban on leases over seven years - the same reasons hold good for providing an exception to the ban on event fees.

Question 37

We invite consultees' views as to whether any further restrictions should be put in place to limit which local rules may be added to the CCS.

We do not believe that there should be any further restrictions put in place in respect of the local rules.

The current prescription in respect of both the...