Another “false start” for the implementation of a commonhold system of home ownership could be “fatal”, according to Law Commissioner for property, family, and trust law, Nicholas Hopkins.
Speaking at a committee meeting for the Leasehold and Freehold Reform Bill, Hopkins warned of the dangers of a partial implementation of commonhold, stating that such a mistake could be disastrous for the system.
He explained commonhold has a “history”, having been introduced in the 2002 Commonhold and Leasehold Reform Act and not having taken off since then.
Hopkins cautioned the legal regime for commonhold needs to be looked at “as a whole” to make sure it works properly for the unit owners, developers and lenders.
“We need a legal regime that works and we need to remove any other blocks on commonhold,” he added.
Commonhold provides freehold home ownership for flats or other interdependent buildings and is an alternative to leasehold ownership of flats, and other properties that share communal areas or services.
Instead of owning property as a leasehold for a fixed period of time, with commonhold you own your property as a freehold indefinitely.
Hopkins believed commonhold was preferable to leasehold, an opinion that was also expressed by the secretary of state during the second reading of the bill.
However, while discussing the benefits of commonhold, Hopkins acknowledged the government chose not to include any of the Law Commission’s recommendations in the bill.
When asked if he thought the absence of commonhold in the bill represented a missed opportunity, Hopkins stated that, while the commission is tasked with making recommendations to the government, that implementation is very much a political question.
“If commonhold works you don’t need leasehold, but the question of whether you mandate commonhold is not just a legal question, there is a political question there,” he explained.
Bill benefits
Despite not including recommendations on commonhold, Hopkins stated the bill will have a “sustainable impact on leaseholders”.
He explained it would implement “key recommendations” that would be most impactful to leaseholders in providing them with much greater security and control over their homes.
These recommendations will also put the financial value of the home in the leaseholder’s hands rather than in the landlord hands.
Additionally, it will allow leaseholders the right to control of the management of their block.
This will, according to Hopkins, all have a “considerable impact” for leaseholders exercising enfranchisement rights and leaseholders who are exercising the right to manage.
However, Hopkins added that he expects the bill to change in the future, saying: “There will be some technical amendments to come that refine the technical elements of the clauses.”
tom.dunstan@ft.com
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