Condominium – Is English Commonhold in Difficulties?
Condominium – Is English Commonhold in Difficulties?

Summary/Abstract: The UK Parliament has, by the Commonhold and Leasehold Reform Act 2002 and Commonhold Regulations 2004 created commonhold, a new form of property holding for multi-occupied buildings, as an alternative to the long lease system traditionally used by developers to create apartments in such buildings. Commonhold has attractive features, as by conferring freehold ownership of units within the building on apartment owners, and by providing for rules for the permanent management of the building by a commonhold association, a company which owns the building’s common areas and facilities. A number of defects have emerged with commonhold which are considered in this article. The protection offered by the guarantee against personal liability conferred on unit holders, as members of the commonhold association, is questionable. The lack of any real remedies where a unit holder defaults with the payment of regular assessments required to maintain the building housing the commonhold units is a particularly serious omission. Additional negative aspects could contribute to rendering commonhold unattractive, notably, a faulty prohibition on granting leases for over seven years of residential units. Given the freehold nature of commonhold units and the appetite for freehold ownership, reforms to the legislative rules should be attempting, in the hope of increasing the advantages of the new institution to English purchasers, so that commonhold may eventually enjoy the success of similar institutions in the civil and mixed-law jurisdictions referred to in this article, which contain useful lessons to draw on.

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