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 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 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
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
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