Is leasehold about to be replaced with commonhold?
Legal experts say there is growing body of support for the move, but warn that commonhold is far from perfect form of home ownership.
Two leading legal experts have revealed that there is a groundswell of opinion in government and legal circles to replace the current leasehold system with ‘commonhold’.
James Souter and Lauren Fraser from law firm Charles Russell Speechlys LLP have published a blog causing ripples in the legal profession that claims there is a ‘growing body of support’ for the largely unloved system of commonhold.
It was introduced in 2004 to replace the current leasehold ownership model that includes some six million homes in England and Wales.
If the legal duo’s predictions are accurate then this would introduce a drastic and wide-ranging change to the way many homes are owned.
The government and the Law Commission are both currently considering the responses from the UK property and legal industries to their parallel consultations on ‘unfair practices in the leasehold market’ and a decision from the government is thought to be due very soon.
Consultations
The Ministry of Housing, Communities and Local Government consultation has proposed banning the sale of leasehold houses, prohibiting excessive ground rent increases and introducing measures to improve how leasehold homes are bought and sold.
“Supporters of commonhold anticipate that the structure will inspire property owners to join together and manage their building in a constructive and positive manner,” Souter and Fraser say.
But the duo also warn that Commonhold will need reforming before it can replace leasehold including finding a way to enable disputes between property owners in blocks to be solved.
“There must be careful consideration as to how a widespread transition between systems would be delivered and how it would impact on the existing property market as well as the delivery of new properties.”
