Law Commission seeks conveyancer’s feedback on commonhold call for evidence

The Law Commission is seeking the views of conveyancers and property professionals to help shape a law which could help people own their flats outright.

The independent legal body wants views on the homeownership status called commonhold, which provides an alternative to residential leasehold.

Differing to leasehold, owners own their ‘unit’ outright, so their ownership doesn’t run out at a point in the future and they don’t have a landlord.

However, since the law came into force in 2004, fewer than 20 commonhold developments have been created.

In light of this, the Law Commission is launching an 8-week call for evidence to find out what’s stopping commonhold taking off.

Law Commissioner Professor Nick Hopkins said:

“It’s clear leasehold law is a problem with some managing agents charging over the odds for the upkeep of shared areas, and the process of extending a lease costly and time-consuming.

“Commonhold provides an alternative – giving unlimited ownership of a property and a stake in how the rest of the building or shared area is managed. But less than 20 have been created in the last 14 years.

“We want to find out what’s stopping people, and how the law could be improved to make commonhold more common.”

Across England, there are now estimated to be over 4 million leasehold properties. However, a number of concerns have been raised over this ownership type during recent months.

More than 6,000 responses were submitted to the recent government consultation on unfair leasehold practices. The vast majority of responses expressed concerns about the buying experience and living in a leasehold property.

Commonhold differs to leasehold in the following key ways:

  • Ownership doesn’t run out, whereas leases expire
  • Standard rules and regulations apply which could simplify conveyancing as well as reducing costs
  • It means the owner has a stake in the wider building, with owners running shared areas together

Alongside efforts to reform leasehold law, the Law Commission is releasing a consultation to help find out why commonhold’s take up has been so low, followed by proposing reforms to reinvigorate it.

The Commission is asking for views on three broad themes:

  • What the difficulties in creating or converting to commonhold are
  • What issues make commonhold unattractive to homeowners
  • What issues make commonhold unattractive in the wider property sector

Following this call for evidence, a full consultation will address the technical legal reforms necessary for commonhold to succeed.

Whilst the Commission will be focussing solely on legal issues, it also invites comments on what other steps should be taken to encourage the use of commonhold. These wider issues will be considered by the Government separately to the Law Commission.

The Law Commission announced that it was to start a project on residential leasehold and commonhold as part of its 13th Programme of Law Reform.  This is the first step in the project.

Open until Thursday 19 April, the consultation can be accessed here: https://www.lawcom.gov.uk/project/residential-leasehold-and-commonhold/

Today's Conveyancer