Commonhold

Commonhold is a form of freehold property ownership in England and Wales, designed to provide an alternative to leasehold for flats and other properties in multi-unit developments. Introduced by the Commonhold and Leasehold Reform Act 2002, it aims to give unit owners more control and avoid the issues often associated with leasehold, such as ground rent, service charge disputes, and the leaseholder’s lease expiring.

Under a commonhold system, each owner holds a freehold title to their individual unit, such as an apartment. They also own an equal share in the common parts of the building or development, which can include hallways, gardens, roofs, and lifts. This common ownership is managed by a commonhold association (CHA), a company limited by guarantee, which is owned and controlled by the unit holders. The CHA is responsible for the maintenance, repair, and insurance of the common parts, funded by service charges paid by the unit holders.

When a unit is sold, the commonhold status of that unit and the overall development continues. The new owner becomes a member of the CHA and takes on the responsibilities and rights of the previous owner. This contrasts with leasehold, where a new lease is often granted upon sale, or the leaseholder buys the freehold of the building (enfranchisement). Commonhold is intended to be a more transparent and democratic system, empowering residents to manage their own property collectively and avoid the complexities and potential pitfalls of leasehold ownership. However, its uptake has been relatively low since its introduction.