02/09/2020
Author : Mary-Anne Bowring
Do you know what commonhold is? If you don't, you're not alone. Fewer than 20 commonhold developments have been created since the Commonhold and Leasehold Reform Act 2002 came into force in 2004.
Unlike leasehold, commonhold allows a person to own a freehold unit (their flat) outright and at the same time become a member of the company which manages the communal areas and buildings. There is no landlord, no ground rents and no time-limited, depreciating asset. This sounds like a great improvement on the complex and tricky to navigate leasehold system, so why has commonhold proved so unpopular?
Earlier this year, when asked for comment on commonhold, Peter Haler, a former CEO of LEASE, explained that the 2002 Act was badly conceived from the start. "It was so badly done it makes the Dangerous Dogs Act look like English literature", he said. "Peter believes the Act as it exists today is not fit for purpose and is not fixable: proper reform is needed" He said. The government agrees. As a result, the Law Commission has been tasked with proposing reforms to revitalise commonhold as a workable alternative to leasehold, for both existing and new homes and is now trying to find out which aspects of the law of commonhold have made it so unpopular.
A Call for Evidence, published in February, highlighted some issues with commonhold as it stands, which are making it unattractive to homeowners and to the property sector as a whole. Following up on this, a consultation paper titled: Reinvigorating commonhold: the alternative to leasehold ownership, has now been published.
It sets out a range of proposals aimed at making commonhold work better. These include:
To read the proposals in full go to https://consult.justice.gov.uk/law-commission/commonhold/ and if you feel strongly about the issues raised you can respond using the online form.
The consultation period is open until 10 March 2019 and the Law Commission expects to publish its final report during the course of the year.