commonhold 1024x1024 - Will commonhold finally become the new leasehold?

Will commonhold finally become the new leasehold?

There are currently three ways that a property can be held. They are freehold,...

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Will commonhold finally become the new leasehold?

9th July 2018

News : Residential Property

There are currently three ways that a property can be held. They are freehold, leasehold and also the lesser known commonhold.  Commonhold is the alternative to a leasehold title.

How does commonhold work?

Commonhold is primarily intended to benefit the occupiers of flats. There is a commonhold association who would deal with the management of the building and common areas. The homeowner would be a member of this.  There would still be a freehold title of the building and the individual properties would be issued a separate commonhold title.

It was introduced back in 2004.  Unfortunately, it never took hold and builders continued to sell leasehold properties. No-one really knows why this was the case other than the fact that it was new and unknown and the model for it had a few issues. However, with the current view on leasehold properties that both mortgage lenders and buyers have, it could mean that leasehold properties slowly become a thing of the past.

What are the benefits?

  • It is not for a term of years like leasehold and it does not run out
  • Owners share the running of the building rather than an independent landlord
  • Sales of these properties could be quicker as there would be a community statement and set form of documents available not open to negotiation

What next?

Under the leasehold reforms shortly going through Government Consultation, the government will be looking at how to make the title more attractive to builders and lenders with a view to taking the lead over leasehold properties.

We wait to hear what changes may be afoot in this area later this year.

For further details, please click the following links:-

https://www.lease-advice.org/advice-guide/commonhold/

https://www.lawcom.gov.uk/project/commonhold/

If you are buying a property and need a conveyancing solicitor, why not give us a call on 0800 389 7093 and our team of specialists will be able to assist. Alternatively you can visit our Residential Conveyancing services page here or complete this form for a call back.

 

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