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Commonhold to give leaseholders more control over their homes
The government is planning to give leaseholders more control over their homes by developing a new collective ownership system known as commonhold.
The commonhold model is used widely around the world and provides a structure for homeowners to collectively own the building their flat is in, with a greater say on their building’s management, shared facilities and related costs. They are in control of their building through a ‘commonhold association’.
There are no hidden costs or charges, preventing some of the unfair practices currently seen in some leaseholds.
The newly formed Commonhold Council will manage the system with the aim of making home ownership fairer and more secure.
Housing Secretary Robert Jenrick said: “The new Commonhold Council will – together with leasehold groups and industry experts – pave the way for homeowners in England to access the benefits that come with greater control over your home.
“We are taking forward the biggest reforms to English property law for 40 years – and the widespread introduction of commonhold builds on our work to provide more security for millions of existing leaseholders across England, putting an end to rip-off charges and creating a fairer system.”
This builds on the announcement in the Queen’s Speech, where the government set out its intention to restrict ground rents for new residential long leases to a peppercorn. Earlier this year, the government also announced changes that will mean that any leaseholder can extend the lease on their home by 990 years, on payment of a premium, and will no longer pay any ground rent to the freeholder.
A Law Commission report said last year that the leasehold system was not working for homeowners. Ministers hope these changes will make it fairer, cheaper and simpler.
We shall keep clients informed of developments.
Please contact us if you would like advice about the legal aspects of buying or selling a home.