Commonhold

Current project status

• Initiation: Could include discussing scope and terms of reference with lead Government Department
• Pre-consultation: Could include approaching interest groups and specialists, producing scoping and issues papers, finalising terms of project
• Consultation: Likely to include consultation events and paper, making provisional proposals for comment
• Policy development: Will include analysis of consultation responses. Could include further issues papers and consultation on draft Bill
• Reported: Usually recommendations for law reform but can be advice to government, scoping report or other recommendations

Making commonhold a preferred alternative to leasehold ownership. We published our report on commonhold (“Reinvigorating commonhold: the alternative to leasehold ownership”) on 21 July 2020.

Download the full report on commonhold 

Download the summary of the report on commonhold 

Download our open letter to lenders on taking commonhold as security 

Other documents relating to the project are available from the drop-down menus at the bottom of this page.

We also published our reports on leasehold enfranchisement (“Leasehold home ownership: buying your freehold or extending your lease”) and the right to manage (“Leasehold home ownership: exercising the right to manage”) on 21 July 2020.

The page for the enfranchisement project may be found here.

The page for the right to manage project may be found here.

Summary: The future of home ownership: download our summary of all three residential leasehold and commonhold reports and how they fit with Government’s own reforms.

At a glance: the future of home ownership: download our short “at a glance” summary of the future of home ownership.

In more detail: the future of home ownership: download our introductory chapter to all three reports, which explains how our reports fit with Government’s own reforms, and sets out the future of home ownership after reform.

The problem

Commonhold was introduced in 2002 as a way of enabling the freehold ownership of flats and avoiding the shortcomings of leasehold ownership.

However, fewer than 20 commonhold developments have been established since the commonhold legislation came into force. Flats in England and Wales continue to be owned, almost inevitably, on a leasehold basis. Unlike practices in most other countries across the world, flat owners in England and Wales continue to hold leasehold interests that will expire at some point in the future, and the landlord makes the key decisions about the management and costs of their building. Commonhold enables flats to be owned on a freehold basis so that owners’ interests can last forever, and gives decision making power to the homeowners.

The project

Our commonhold project seeks to identify why commonhold has failed to take off, despite its benefits, and to address problems with the law of commonhold which have been preventing its uptake.

The project formed part of our 13^th Programme of Law Reform.

Government has asked us to recommend reforms to reinvigorate commonhold so that it may offer a workable alternative to leasehold, for both existing and new homes. Our full terms of reference are available here

We previously published a call for evidence in February 2018 and a consultation paper in December 2019. In our consultation paper, we made provisional proposals to make commonhold work for homeowners, developers, mortgage lenders and across the wider property sector. The consultation period closed on 10 March 2019.

Report

We published our final report on 21 July 2020. In our report, we make numerous recommendations that seek to make commonhold not only a workable, but a preferred form of homeownership to residential leasehold.

Our recommendations include measures designed to:

• make it easier for leaseholders to convert to commonhold and gain greater control over their properties;
• enable commonhold to be used for larger, mixed-use developments which accommodate not only residential properties but also shops, restaurants and leisure facilities;
• allow shared ownership leases to be included within commonhold;
• give owners a greater say in how the costs of running their commonhold are met and ensure they have sufficient funds for future repairs and emergency works;
• make it easier to take action against those who fail to pay their share of the commonhold’s costs;
• ensure commonholds are well maintained and insured, with new powers to replace directors who are not complying with the commonhold’s rules;
• provide owners with flexibility to change the commonhold’s rules while improving the protections available to those affected by the change; and
• improve mortgage lenders’ confidence in commonhold to increase the choice of financing available for home buyers.

The Commonhold Council

In May 2021,  the Government established a Commonhold Council as a partnership of industry, leaseholders and Government that will prepare homeowners and the market for the widespread take-up of commonhold. Professor Nick Hopkins is appointed to the Council’s Technical Support Group.

Contact

By email to: propertyandtrust@lawcommission.gov.uk