Editor's note: This brief was summarised by The Property AI Newsroom from a report by Property118. Read the original article for full details.

Commonhold: Key Facts Letting Agents Should Know

Commonhold is an alternative form of property ownership to leasehold, providing freehold ownership for flats and other interdependent buildings. Although it was introduced over twenty years ago, it has been used sparingly, with fewer than 20 commonhold developments built in England and Wales, comprising fewer than 200 units, according to the government’s Commonhold White Paper.

The Commonhold and Leasehold Reform Bill, announced in this year’s King’s Speech, aims to modernise commonhold and establish it as the default tenure for new flats. This comes amid ongoing concerns from leaseholders about management, costs, and lack of control in leasehold arrangements.

What Commonhold Is

Government guidance summarises commonhold as providing freehold home ownership for flats or other interdependent buildings. Unlike leasehold, where the buyer owns a lease for a fixed period and the building is owned by a separate freeholder, commonhold unit-holders own their properties as freeholders indefinitely. Commonholders collectively manage the building through a commonhold association, a company made up of the unit-holders. Shared areas such as the structure, roof, hallways, lifts, and gardens are owned and managed by this association. The rights and obligations for the building and each unit are set out in a commonhold community statement.

What Commonhold Is Not

Agents should avoid describing commonhold as freehold with no strings attached. Commonhold buildings still require insurance, maintenance, repairs, and compliance with fire safety requirements, with costs shared among unit-holders. The main difference is that these obligations are managed collectively, rather than through a landlord-tenant relationship. The commonhold community statement may include rules on alterations, use, pets, and nuisance, similar to leasehold buildings.

Commonhold is also not the same as share of freehold. Many flats sold as share of freehold are still leasehold flats, and owning a share of the freehold does not remove lease obligations.