From this week, flat owners will have an alternative to owning the leasehold for their property.
‘Commonhold’ is now available to owners of premises forming part of a larger building, giving property owners the chance to be permanent freeholders rather than just leaseholders, who own the property in question for a limited time only.
The new rules have been introduced as a result of the Commonhold and Leasehold Reform Act 2002, and give greater flexibility to property owners, giving them the option of permanent ownership.
The take up of the commonhold is voluntary, and the conditions for buying leaseholds and freeholds remain unchanged.
Under the regulations, the commonhold flat is bought outright, and the rest of the building, or the ‘common parts’, such as the staircase, hallways and grounds, would be owned and managed by a ‘commonhold association’, a limited company of which only the owners of the flats within the building can be members.
Therefore, not only will the commonholder own the flat permanently, they will also have an interest in the ownership and management of the common parts through membership of the commonhold association.
Land Law Minister David Lammy said: ‘Commonhold will allow flat owners to be freeholders of their own properties and to deal collectively with repair, insurance, anti-social behaviour and other matters of mutual interest through their own limited company. It may not be suitable for all owners and all buildings, but it allows property owners to consider what works best for them.’