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

We're analysing responses to our call for evidence on commonhold law.

Download the call for evidence.

Download the summary document.

Download the response form.

The problem

There are now estimated to be over 4 million leasehold properties across England but concerns have been raised over this ownership type.

Commonhold was introduced in 2004 (when a law passed in 2002 came into force) as a new way to own property. It allows a person to own a freehold ‘unit’ – like a flat within a building – and at the same time be a member of the company which manages the shared areas and buildings.

Commonhold has a number of potential advantages over leasehold. These are:

  • Ownership doesn’t run out – unlike leases which expire and can be costly to extend.
  • Standard rules and regulations apply – which should make conveyancing simpler and cheaper
  • Owners have a stake in the wider building and do not have a landlord – instead, owners run the shared areas together.

Despite these advantages fewer than 20 commonhold developments have been created. Manchester and London have just one commonhold scheme each.

The project

Our 13th Programme consultees told us that there are a number of issues within the current commonhold model. These issues could make commonhold unattractive to homeowners, developers, mortgage lenders and others across the wider property sector.

Our project will look at why commonhold has failed to gain popularity, and what changes can be made to the current law to make it an attractive and workable alternative to residential leasehold.

On 22 February 2018 we launched an 8 week call for evidence to find out what’s stopping commonhold becoming more common.

We are asking for views on three broad themes:

  • What the difficulties in creating or converting to commonhold are
  • What issues make commonhold unattractive to homeowners
  • What issues make commonhold unattractive in the wider property sector

Later this year, a detailed consultation paper will set out options to address the issues which have been raised in response to our call for evidence.

Contact

By email to:   propertyandtrust@lawcommission.gov.uk

 

Documents and downloads

Project details

Area of law

Property, family and trust law

Commissioner

Professor Nicholas Hopkins