Commonhold Reform: A New Era for Flat Ownership in England and Wales?

The UK Government has taken a major step towards revolutionising homeownership with its Commonhold White Paper published on the 3rd of March 2025. This document outlines plans to make commonhold the default tenure for flats in England and Wales, replacing the long-criticised leasehold system. These reforms are set to provide homeowners with greater control, flexibility, and financial security over their properties.

What is Commonhold?

Commonhold is a form of property ownership that allows flat owners to own their homes on a freehold basis, rather than being leaseholders. Unlike leasehold arrangements, which often involve paying ground rent and service charges to a third-party landlord, commonhold ensures that ownership and decision-making rest with the residents themselves.

Key Benefits of Commonhold

• Eliminates Ground Rent and Lease Extensions: Homeowners will own their flats outright with no lease expiration, removing the need for costly lease extensions.
• Greater Control for Homeowners: Residents collectively manage their buildings through a Commonhold Association, rather than relying on external freeholders.
• Fairer Service Charges: Costs related to maintenance and repairs will be transparent and democratically managed.
• Simpler Dispute Resolution: The new system introduces clearer mechanisms to prevent and resolve conflicts among residents.
• Flexibility for Future Adaptations: Owners will have more power to update and adapt rules as the needs of the building evolve.

Legal Challenges and Considerations

While the transition to commonhold offers significant benefits, it also presents legal and logistical challenges:

• Converting from Leasehold to Commonhold: Existing leaseholders looking to convert will need to navigate a legal process requiring significant majority agreement from fellow leaseholders.
• Understanding New Legal Frameworks: The new commonhold structure involves specific governance rules that property owners must comply with.
• Impact on Property Transactions: Buyers, sellers, and mortgage lenders will need to adapt to the changes in property ownership models.

How Our Law Firm Can Help

At Moore and Tibbits, our experienced property lawyers are well-equipped to guide you through these changes. Whether you are a leaseholder, developer, lender, or buyer, we can help you:

• Understand Your Rights under the new commonhold framework.
• Navigate the Conversion Process from leasehold to commonhold.
• Ensure Compliance with the legal requirements for commonhold associations.
• Advise on Buying and Selling Commonhold Properties, ensuring smooth transactions.

For all of your Commercial Property legal advice and needs, contact a member of our team today on 01926 491181.

Article by: Florrie Talty - Sanghera | Trainee Solicitor