Most properties in England and Wales are traditionally purchased either leasehold, or with a share of the freehold.

The Commonhold and Leasehold Reform Act 2002 introduced a further form of ownership based on the way properties are usually sold in the US.

This latest form of ownership has been presented as an alternative to Leasehold ownership which provides an alternative approach for developers when selling their flats and leaseholds properties and for Residents’ Management Companies for Leasehold properties where the freehold has been purchased.

Commonhold ownership will provide owners with membership of the Commonhold association which provides a share of the ownership which in turn offers a share in the control of their development – rather than it being left to a landlord to manage the insurance, repairs and maintenance etc

Both leasehold and commonhold ownership require rent and service charge to be paid. Although commonhold ownership offers a share in the control of their properties, the commonhold requires that the practical management and governance of the building be in accordance with the Commonhold Community Statement, which would be agreed and produced by the Commonhold Association. This, to all intents and purposes, replaces the lease in setting the conditions of occupancy and will be a public document, registered at the Land Registry.

The commonhold approach was expected to be very popular, because of it allowing owners the ability to manage their own development, however, this new form of title is taking some time to be used by developers and there have currently been few transfers from leasehold ownership to commonhold.

If you are considering converting to commonhold ownership you need to have purchased your freehold and be applying for commonhold ownership with full consent of all flat-owners.

There are few conveyancing solicitors that are thoroughly aware of commonhold ownership, it you are considering transfer to commonhold ownership or are purchasing a commonhold property always check your solicitor has had experience of commonhold transactions.

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