Law Commission launches Consultation on Commonhold

England, Wales

The Law Commission yesterday published its Consultation Paper on commonhold reform for England and Wales, “Reinvigorating commonhold: the alternative to leasehold ownership”. The paper can be found at the following link: https://www.lawcom.gov.uk/project/commonhold/. The deadline for responding to the Consultation is 10 March 2019.

There will be many in the property industry who will be somewhat sceptical on new proposals on Commonhold in view of the complexities of the original scheme and how little it has been used. It may also be noted that whilst it may not have been a complete solution, bringing into force the Law Commission’s own legislative proposals on positive land obligations would have helped as an alternative to leasehold ownership.

The new paper looks at aspects of the law of commonhold which may be preventing its uptake and includes proposals which would:

  • Enable commonhold to be used for larger, mixed-use developments, which accommodate not only residential properties but also shops, restaurants and leisure facilities.
  • Allow shared ownership leases and other forms of affordable housing to be included within commonhold.
  • Make it easier for existing leaseholders to convert to commonhold and gain greater control over their properties.
  • Improve mortgage lenders’ confidence in commonhold.
  • Provide homeowners with a greater say in how the costs of running their commonhold are met.
  • Enable homeowners to end unattractive long-term contracts imposed by developers.

Among the questions asked by the Law Commission are whether financial incentives should be offered to encourage the take-up of commonhold and whether the adoption of commonhold should be compelled.