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Commonhold
This section of the site is edited by James Driscoll, Trowers and Hamlins. For courses run by James on Commonhold go to In-house courses.
Summary of commonhold
Commonhold finally came into effect on 27 September 2004. It is now possible for new developments to be built, marketed, sold and managed under Commonhold rather than on a leasehold basis, the usual way of selling developments of such interdependent buildings as blocks of flats, office blocks and mixed-use developments. It is also possible for existing residential developments to convert to commonhold if the leaseholders agree on this unanimously and they either own the freehold or they purchase it, perhaps through an enfranchisement claim. The problems of freehold flats may also be solved if the flat owners convert to commonhold.
Under Commonhold, each unit owner (such as a flat owner) has a freehold estate in the unit and is also a member of a commonhold association, which owns and manages the common parts of the commonhold development. There are no superior estates or interests in the commonhold and so it differs fundamentally from leasehold development. Another fundamental difference between commonhold and leasehold is the standardisation of the documentation: both the memorandum and articles of association of a commonhold association and the commonhold community statement (the rules of the commonhold) are prescribed in Schedules to the Commonhold Regulations.
Commonhold and Leasehold Reform Act 2002, Part 1
Commonhold and Leasehold Reform Act 2002 (Commencement No 4) Order 2004 (SI 2004/1832). Brought Part 1 of the 2002 Act into force on 27 September 2004.
Commonhold Regulations 2004 - The regulations under which commonhold operates. The standard documentation required is contained in the schedules to the regulations, including the memorandum and articles of association of a commonhold association and the commonhold community statement (the rules of the commonhold).
A non-statutory guide to the regulations has been published by the DCA in pdf format: Guide to the Commonhold Regulations
Commonhold (Land Registration) Rules 2004 (SI 2004/1830) the regulations that set out the requirements for registration of commonhold developments. See also LR Practice Guide 60
Land Registration Fee (Amendment) Order 2004 (SI 2004/1833.) - Provides for the fees to be paid in commonhold cases
Standard documentation
As stated above, one of the characteristics of a Commonhold is the general standardisation of the documentation. This has been given a further boost with the recent publication by the Department of Constitutional Affairs on guidance on using voluntary clauses in the Commonhold community statement issued 6 December 2004. This welcome guidance will serve as useful precedents and the model worked example of a Commonhold community statement will also be of assistance to practitioners.
Commonhold: Guidance on the drafting of a Commonhold Community Statement including Specimen Local Rules
Articles
Six articles in the Estates Gazette:- Ownership will never be the same again by James Driscoll How commonhold will work in practice
- Sign up for a new tenure by Linda Chamberlain Deals with registration of commonhold interests
- Constitution documents: A new drafting challenge by Trevor Aldridge QC Explains the prescribed documentation to be used
- The jury is out, for the time being at least by Andrew Hopkins of the Council of Mortgage Lenders
- From commonhold to commonplace by Philip Freedman The opportunity for mixed use developments
Estates Gazette, 25 September 2004, pages 124 to 131.
Other articles:
"Commonhold in Practice - Advising the Unit-holder- Part 1: Rights and Obligations" by Andrew Hindle, Boodle Hatfield - The first of two articles, which considers in some detail the unit-holder's rights and obligations, covering principally use, maintenance and commonhold assessment (ie service charges). (L&T Review, vol 7, issue 3, p47).
Lessee-Owned Blocks: Moving Towards Commonhold by James Brenan, solicitor A review of the position of tenants with regard to upkeep and improvement of their blocks where they have enfranchised and a comparison with the merits or otherwise of Commonhold. (Landlord and Tenant Review vol 8, issue 1, p2)
- Commonhold (1) by James Driscoll Explains how commonholds can be set up and registered at the Land Registry (Solicitors Journal, 17 September 2004, p1046)
- Commonhold (2) by James Driscoll Explains what happens once a new commonhold is set up, how existing developments can be converted into commonhold and the nature of ownership under commonhold (Solicitors Journal, 24 September 2004, p1082)
- Commonhold (3) by James Driscoll Deals with commonhold documentation (Solicitors Journal, 1 October 2004, p1112)
- Constitution documents: A new challenge by Trevor Aldridge QC Another article explaining the position in relation to the standard documentation required for commonholds (Estates Gazette, 2 October 2004, p143)
“Safe as houses” by James Driscoll, Trowers and Hamlins – Deals with various misconceptions held in relation to commonholds and points out the various advantages over traditional leasehold developments. Points out that the first major commonhold is taking shape – the Oakgrove Millennium Development at Milton Keynes – a mixed use development consisting of more than 2,300 new homes, two schools, a health centre, shops and other commercial premises. (Property Law Journal, 17 April 2006, p3).
Disability discrimination
The Disability Discrimination Act 2005 inserted section 24A to 24M into the 1995 Act which created further obligations in relation to the prevention of discrimination in the letting of premises. These regulations expand upon those provisions and also contain provisions relating to discrimination in the management of commonholds (regulations 8 and 9).
Disability Discrimination (Premises) Regulations 2006 (SI No. 887)
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