Whilst commonhold ownership is widespread in the US, Australia and across Europe, it has struggled to gain traction in the UK - fewer than 20 commonhold developments have been built here since it was introduced in 2002. With developments of residential flats, with or without commercial units, being big business in the UK, why is commonhold not - in fact - common?
Commonhold enables the freehold ownership of flats, with no expiry date, and to be managed by an owners association instead of a landlord. This model removes some of the ongoing revenue streams for freeholders such as ground rent, service charge collections and lease extension fees. On the other hand, streamlining the process of conveyancing for sales of flats and removing the ongoing management, could save developers time and money.
The Law Commission are currently developing a new policy to reinvigorate commonhold as an appealing ownership option for all parties involved. However, there are concerns amongst the legal profession as to whether the Commission's proposals go far enough.
Paul Oldershaw, Head of Commercial Property, commented; "Whilst commonhold provides more control for owners, our commercial clients need the commonhold model to be more flexible. The Commission need to ensure that reforms do not swing the balance too far in favour of tenants and away from the developers and investors who, ultimately, will be the decision makers about lease or commonhold ownership of their new build flats."
Our commercial property team are very experienced in working with developers and making the complex process of leasehold or commonhold sales straightforward. Speak to one of our solicitors in Norwich now on 01603 620508 or email us your query.