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Law Commission publishes reports on leasehold and commonhold reform

2020 News Articles

21 Jul 2020

The Law Commission has today published three reports setting out recommendations for the reform of the law of residential leasehold and commonhold:

  • Leasehold home ownership: buying your freehold or extending your lease
  • Leasehold home ownership: exercising the right to manage
  • Reinvigorating commonhold: the alternative to leasehold ownership

They have also published a summary explaining the future of home ownership after reform and of how their recommended reforms fit with Government’s proposed reforms. That overall summary can be accessed by clicking here.  

 

Summaries of the Law Commission reports, the reports themselves, and other accompanying documents, can be found at the following link: https://www.lawcom.gov.uk/project/residential-leasehold-and-commonhold/.

 

Leasehold home ownership: buying your freehold or extending your lease

This report sets out comprehensive recommendations for reforming the law of leasehold enfranchisement: the process by which leaseholders may buy - individually or collectively - the freehold of their property or extend their lease.

 

The Law Commission recommendations are intended to reduce the costs of making an enfranchisement claim (and give leaseholders more control over those costs), make enfranchisement rights available to more leaseholders in more types of property, and to make the enfranchisement process less complicated and protect leaseholders from procedural traps.

 

In January 2020, the Law Commission published separately their Valuation Report providing Government with options to reduce the price payable on enfranchisement.

 

Leasehold home ownership: exercising the right to manage

The right to manage is a right for leaseholders to take over the management of their building without buying the freehold.

The Law Commission recommendations would simplify the criteria that govern which properties may be subject to an RTM claim and make the RTM available to more leaseholders in more types of property. Their recommendations would also reduce the costs of making an RTM claim.

Reinvigorating commonhold: the alternative to leasehold ownership

Commonhold enables the freehold ownership of flats, offering a way of owning property that avoids the shortcomings of leasehold ownership.

The Law Commission make recommendations to address the shortcomings in the legal design of the commonhold scheme and to reinvigorate commonhold as a workable alternative to leasehold, for both existing and new homes. Their recommendations are intended to result in a commonhold regime that is fit for purpose for all those involved with a commonhold, whether because they wish to convert leasehold premises to commonhold, are living in a commonhold, are building a new commonhold, or are lending in respect of a commonhold.

For further information about the Law Commission recommendations, please visit their project website, here. 

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