For generations, buyers of flats in England and Wales have faced an awkward legal compromise. They may describe themselves as homeowners, yet technically they own a lease that becomes shorter every year, while somebody else owns the freehold of the building.
Commonhold was designed to solve that problem. It allows each homeowner to own the freehold of their individual flat or other property, while the shared structure and communal areas are owned and managed through an association controlled by the owners themselves.
On paper, the idea is straightforward. In practice, commonhold has remained extraordinarily rare since it was introduced in 2002. Fewer than 20 commonhold developments currently exist across England and Wales, containing fewer than 200 homes.
That is now likely to change. The government intends commonhold eventually to become the standard way of owning flats, but the new legal framework remains proposed rather than operative. For anyone buying or owning property today, it is important to separate the commonhold system that already exists from the reforms still passing through the legislative process.
One thing I learned from property work is that the name given to an ownership structure never tells the whole story. Commonhold avoids several deep-rooted problems associated with leasehold, but it does not remove the need to maintain a building, raise money, make difficult decisions or live alongside other owners with different priorities.
In brief: commonhold is a form of freehold ownership designed for flats, mixed developments and other properties sharing common areas or services. Each owner holds the freehold of their own unit and becomes a member of a commonhold association, which owns and manages the common parts. There is no expiring lease, ground rent or separate landlord, but owners remain responsible for shared costs and must follow the rules in the Commonhold Community Statement.
Jurisdiction: This guide covers commonhold property in England and Wales. Scotland and Northern Ireland have different systems of property ownership.
Contents
- What is commonhold in simple terms?
- How does commonhold work?
- The commonhold association
- The Commonhold Community Statement
- Commonhold charges and reserve funds
- Commonhold vs leasehold
- Commonhold vs share of freehold
- Advantages of commonhold
- Disadvantages and practical risks
- What to check before buying
- Converting leasehold to commonhold
- Why is commonhold so rare?
- Commonhold reform in 2026
- Should buyers wait for commonhold?
- Frequently asked questions
- What commonhold changes—and what it does not
What is commonhold in simple terms?
Commonhold is a way of dividing a building or estate into separately owned freehold properties, known as commonhold units, and shared areas known as the common parts.
A unit might be a flat, house, shop, office, garage or parking space. The unit owner owns its freehold indefinitely. Unlike a lease, the ownership does not expire after 99, 125 or 999 years.
The common parts are owned by a company called the commonhold association. These commonly include the structure and exterior of an apartment building, together with its roof, foundations, entrance halls, staircases, lifts, gardens and shared services.
Every unit owner is entitled to membership of the association. Through that company, the owners make decisions about repairing, insuring and managing the shared property.
Commonhold was introduced by the Commonhold and Leasehold Reform Act 2002. It has been legally available for more than two decades, although very few developers or existing buildings have adopted it.
Does commonhold mean owning a flat outright?
A commonhold owner holds the freehold of the unit rather than a time-limited lease. In that sense, the flat is owned outright.
However, “outright” should not be mistaken for complete freedom from rules. The unit can still be mortgaged, and its owner must comply with planning law, building regulations and the legally binding rules governing the commonhold.
The roof may also belong to the commonhold association rather than the owner of the top-floor flat, while a balcony or parking space may be part of the unit, part of the common areas or a limited-use area. The registered plans and commonhold documents determine the answer.
How does commonhold work?
A commonhold has three central elements:
- the freehold commonhold units
- the commonhold association
- the Commonhold Community Statement
HM Land Registry creates a separate freehold title for each unit and another title for the common parts. The unit owner is registered as proprietor of their unit, while the commonhold association is registered as proprietor of the common parts.
The association maintains and manages those shared areas. The owners fund that work through commonhold contributions, currently known as the commonhold assessment, and may also contribute to reserve funds for future expenditure.
The relationship is therefore not one of landlord and tenant. It is a shared ownership and management arrangement between freeholders whose properties depend upon the same building or estate.
A simple example
Consider a block containing ten flats. Each flat is registered as a separate freehold commonhold unit. The communal roof, walls, foundations, hallway, stairs, garden and entrance are owned by the commonhold association.
The ten owners belong to that association. Its directors arrange the building insurance, cleaning, repairs and other services. The owners contribute according to the percentages recorded in the Commonhold Community Statement.
If the roof needs replacement, the cost still has to be met. The crucial difference is that there is no external freeholder deciding how the work should be procured or collecting a financial return from the relationship. The owners make those decisions through their association.
What is a commonhold association?
The commonhold association is a company limited by guarantee created specifically to own and manage the common parts of one commonhold development.
It does not have shareholders or ordinary share capital. Under the current framework, each member’s liability on a winding up is normally limited to £1.
The association must be registered at Companies House and comply with company law. It requires at least two directors, although those directors do not necessarily have to be unit owners. The owners may appoint external professionals or use a managing agent where specialist help is needed.
Every unit owner is entitled to membership. Where a unit is jointly owned, the current rules allow only one of the joint owners to be registered as the member representing that unit.
The directors manage the day-to-day affairs of the association, but they answer to its members. Unit owners can vote on matters such as appointing directors and changing permitted local rules.
Does commonhold mean residents must manage everything themselves?
No. The commonhold association can appoint a professional managing agent, accountant, surveyor or other contractor.
Commonhold gives the homeowners control over whom they appoint and how that professional is instructed. It does not require a group of busy residents to understand lift maintenance, fire safety law, company accounts and major building contracts without assistance.
In reality, many larger commonholds would need professional management. Democratic control and professional management are not opposites: the owners can retain the decision-making power while employing people with the necessary expertise.
What is the Commonhold Community Statement?
Every commonhold is governed by a legally binding document called the Commonhold Community Statement, usually shortened to CCS.
The CCS performs some of the functions that a lease performs in a leasehold building, but it applies across the entire commonhold rather than existing as a separate lease for each flat.
It identifies:
- the boundaries of every unit
- the extent of the common parts
- rights of access and use
- limited-use areas such as balconies or parking spaces
- each unit’s percentage contribution towards shared costs
- voting allocations
- repair, insurance and management responsibilities
- rules governing the use of units and common areas
The format and much of the content are prescribed by legislation. Additional rules can be added for a particular development, but they must be clearly identified and cannot simply contradict the mandatory provisions.
The CCS is registered at HM Land Registry. Anyone considering buying a commonhold property should read it as carefully as a buyer of a leasehold flat would read the lease.
Can the rules be changed?
Some local rules and other parts of the CCS can be amended using the procedures and voting requirements prescribed by law. Any registrable amendment must be registered at HM Land Registry before it takes effect.
This provides more flexibility than many old leases, which may be impossible to alter without the agreement of the freeholder, individual leaseholders and mortgage lenders.
However, majority decision-making creates its own tension. An owner may find themselves bound by a valid change supported by their neighbours even though they voted against it.
Commonhold charges and reserve funds
Commonhold removes ground rent, but it does not make the cost of running a building disappear.
The association needs money to insure, maintain, repair and manage the shared property. Under the current system, the directors prepare a budget known as the commonhold assessment. Each unit pays the percentage allocated to it in the CCS.
The proposed assessment must be notified to the owners, who currently have one month to appeal to the association. After considering any appeals, the directors issue demands for payment. An emergency assessment can be made where urgent work is required.
A commonhold may also establish one or more reserve funds. These allow contributions to be collected gradually for substantial future work, such as replacing lifts, renewing a roof or repairing a communal heating system.
Under the current law, reserve funds are permitted but are not compulsory. The proposed new framework would make a reserve fund mandatory for every commonhold, while leaving owners to decide how much should be contributed.
Can an owner challenge commonhold costs?
The present legal protection is different from the service-charge system applying to leaseholders.
A leaseholder can normally challenge the reasonableness and payability of variable service charges before a property tribunal and may benefit from statutory consultation requirements for qualifying works and long-term contracts.
Under the existing commonhold framework, unit owners do not have those same leasehold tribunal and consultation rights. Their influence is intended to come through membership, voting and the association’s internal procedures. Unresolved disputes may ultimately require court proceedings.
This is a significant qualification to the claim that commonhold costs are automatically more transparent or easier to challenge. Greater control should align the interests of owners and decision-makers, but the outcome still depends on effective governance and access to proper information.
My guide to service charges and what leaseholders can challenge explains the protections applying under the present leasehold system.
What happens if a unit owner does not pay?
The commonhold association can pursue unpaid assessments, reserve-fund charges and interest as ordinary debts. It may obtain a charging order against the unit and, in serious cases, seek an order for sale.
What it cannot do is forfeit a lease, because there is no lease to forfeit. The owner does not automatically lose the freehold of a valuable flat because of the leasehold forfeiture rules.
Unpaid sums must still be taken seriously. A buyer may become responsible for certain outstanding amounts connected with the unit, which is why the financial position must be checked carefully before completion.
Commonhold vs leasehold
| Issue | Commonhold | Leasehold |
|---|---|---|
| Ownership | Freehold ownership of the individual unit | A time-limited right under a lease |
| Expiry | No reducing term or lease-expiry date | The remaining lease term reduces over time |
| Landlord | No separate third-party landlord | A freeholder or superior landlord ordinarily exists |
| Ground rent | None | May be payable under an existing lease |
| Shared costs | Paid through commonhold assessments and reserve-fund contributions | Usually collected as service charges under the lease |
| Management | Controlled through an association of the unit owners | Usually controlled by the freeholder, management company or appointed agent |
| Governing document | One Commonhold Community Statement | Individual leases, which may contain different wording |
| Failure to pay | Ordinary debt recovery, potentially including a charging order and order for sale | Debt recovery and, subject to substantial safeguards, possible forfeiture |
For a fuller explanation of the present system, see my leasehold property guide.
Is commonhold the same as share of freehold?
No. This is one of the most common sources of confusion.
When leaseholders buy a share of their building’s freehold, they normally continue to own their individual flats under leases. They also own shares or memberships in the company that owns the building’s freehold.
The leases do not disappear. They still define the flat, regulate repairs, grant access rights and require service-charge contributions. The leaseholders may grant themselves long lease extensions and remove ground rent, but their flats remain legally leasehold.
With commonhold, each unit itself is freehold. There is no underlying residential lease and no need to extend one.
| Structure | Ownership of flat | Who owns the common parts? | What continues? |
|---|---|---|---|
| Commonhold | Freehold commonhold unit | The commonhold association | The CCS and commonhold obligations |
| Share of freehold | Leasehold flat | Usually a company owned by participating leaseholders | The individual leases |
| Right to manage | Leasehold flat | The existing freeholder | The leases and freeholder’s ownership |
Leaseholders considering ownership or management control can read my guide to collective enfranchisement and my guide to the right to manage.
What are the advantages of commonhold?
No wasting lease
A commonhold unit does not become less valuable merely because a lease term is running down. There is no 80-year threshold, marriage value or need to pay for a statutory lease extension.
This removes one of the strangest features of leasehold homeownership: having to spend a substantial sum simply to preserve the length and marketability of something already bought as a home.
No ground rent
Commonhold ownership does not reserve ground rent. Owners pay their share of genuine building and estate costs, rather than making an additional payment simply because the title is leasehold.
No third-party landlord
The people making management decisions are broadly the same people who live in, own and pay for the building.
That alignment does not guarantee agreement, but it removes the structural conflict that can arise where an external freeholder chooses contractors, arranges insurance or incurs costs that somebody else must pay.
Greater control over management
Unit owners can appoint and remove directors, choose whether to employ a managing agent and influence the association’s priorities.
If service is poor, the association can replace its agent without first acquiring the freehold or exercising a separate statutory right.
More standardised documentation
Leasehold flats in the same building can sometimes be governed by leases granted at different times and containing inconsistent provisions.
Commonhold uses a standard legal framework and one CCS for the whole development. Local rules can be added, but the basic structure is prescribed.
Greater flexibility over time
Some leases prevent improvements that later become desirable, such as electric-vehicle charging points, renewable energy systems or changes to communal facilities.
A commonhold can amend appropriate rules collectively, subject to the required procedures and protections. The legal structure is therefore better able to evolve with the building.
What are the disadvantages and practical risks?
The bills do not disappear
Commonhold changes who controls and benefits from the ownership structure. It does not change the price of scaffolding, roof repairs, lift replacement, insurance or fire-safety work.
A neglected commonhold building can face the same substantial repair liabilities as a neglected leasehold one. The owners may simply discover that the difficult decision now belongs to them.
Collective management can be difficult
Some owners will want preventative maintenance and a substantial reserve fund. Others will favour the lowest possible annual contribution. Owner-occupiers and landlords may have different priorities, as may residents planning to sell soon and those expecting to remain for decades.
I have often found that shared-property disputes become personal surprisingly quickly. A disagreement about a roof quotation can turn into a wider argument about transparency, personalities and whether one group is carrying another.
Commonhold provides a structure for making decisions. It cannot manufacture goodwill or competent leadership.
Owners take on company responsibilities
The commonhold association must comply with company law, maintain records, submit filings, insure and repair the building, collect contributions and enforce obligations.
Directors carry legal duties. A small development may struggle to find owners willing to undertake the role, while professional directors and managing agents add cost.
Majority rule does not satisfy everyone
Democratic control means that owners can be outvoted. A valid decision may require an owner to contribute towards work they did not support or comply with a local rule they opposed.
A successful system therefore needs minority protections as well as majority decision-making. Strengthening those protections is one objective of the proposed reforms.
Underfunding can affect everyone
If several owners fail to pay or the association budgets badly, it may lack the money needed to meet its obligations. The remaining owners may have to contribute towards a shortfall while recovery action is pursued.
A building with low annual charges is not necessarily well run. It may simply be postponing expenditure.
The current system is unfamiliar
With fewer than 200 commonhold units currently in existence, many conveyancers, lenders, valuers and managing agents have limited practical experience of the tenure.
That does not make a commonhold unit unmortgageable, but a buyer should confirm the proposed lender’s position at an early stage.
What should you check before buying a commonhold property?
A commonhold purchase avoids questions about lease length and ground rent, but it still requires careful investigation.
Check the unit title and plans
Confirm exactly what forms part of the freehold unit. The title and CCS plans should identify the flat, garden, balcony, garage, parking space and any storage area.
Check which areas are common parts and which are limited-use areas. Exclusive use of a space does not necessarily mean that the unit owner owns it.
Read the complete CCS
Review the rules governing alterations, use, letting, nuisance, pets, parking and access. Check the percentage allocated to the unit for shared costs and reserve funds, together with its voting rights.
A freehold title does not override the CCS. A buyer who intends to let the property, alter its layout or run a business from home should establish what the rules permit before exchange.
Investigate the commonhold association
Check that the association is correctly registered and examine its articles, directors, Companies House filings and accounts.
Ask whether meetings are held regularly, whether statutory records are maintained and whether owners generally participate. Persistent filing defaults or repeated director resignations may indicate wider management problems.
Review the budget and reserve funds
Obtain the most recent commonhold assessment, accounts, reserve-fund information and details of proposed major work.
Consider whether the current contributions are realistic for the age and condition of the building. A healthy reserve may justify a higher annual payment and reduce the risk of a sudden demand later.
Check for arrears attached to the unit
The seller should obtain a Commonhold Unit Information Certificate recording relevant debts owed to the association.
Under the current system, a new owner may be required to pay certain outstanding sums connected with the unit. Any arrears should therefore be resolved as part of the sale, rather than accepted on an informal promise that the association will not pursue them.
Look for disputes and enforcement action
Ask about complaints, court proceedings, unpaid contributions, neighbour disputes and disagreements with contractors or managing agents.
The fact that residents control the association does not make disputes less relevant. A divided association can be every bit as disruptive as a difficult external landlord.
Check building condition and safety
Review surveys, insurance, fire-risk information, planned maintenance and any building-safety liabilities.
This is especially important in a larger or higher-risk building, where the association and its directors may carry substantial statutory responsibilities.
Examine any developer rights
In a new development, the CCS may reserve rights allowing the developer to finish construction, alter parts of the site or carry out further development.
Establish what can still be built, how long the rights continue and whether the works could affect access, views, noise, parking or future contributions.
The government-funded Leasehold Advisory Service provides a useful guide to buying a commonhold property.
Can an existing leasehold building convert to commonhold?
Yes, but the current procedure is extremely difficult.
The building must be held under a registered freehold title with absolute title before it can become commonhold. Under the present legislation, conversion broadly requires unanimous consent from:
- the freeholder and anyone holding a relevant interest in the freehold
- all relevant leaseholders and subleaseholders
- mortgage lenders and others holding relevant rights over the leases
Existing leases are terminated as part of the conversion. The former leaseholders become freehold unit owners, while the commonhold association takes ownership of the common parts.
The need to secure every relevant consent means that one non-participating leaseholder, an unresponsive lender or a freeholder unwilling to surrender its interest can prevent the present process.
Conversion may also require the leaseholders first to acquire the freehold, with valuation, legal, funding and building-safety issues all needing consideration.
For many existing blocks, buying the freehold collectively remains the more established route to ownership, even though the flats themselves continue to be leasehold.
Why is commonhold so rare?
The original framework failed to create a strong reason for developers to choose commonhold over leasehold.
Leasehold was already familiar to developers, lenders and conveyancers. It could also generate additional income from ground rent, permission fees, insurance arrangements and the later sale of the freehold.
Commonhold offered no equivalent investment interest to sell. Without legislation requiring or strongly encouraging its use, developers generally continued with the established model.
The 2002 framework also struggled with modern developments. Its rules lacked sufficient flexibility for large sites, mixed commercial and residential buildings, phased construction and shared ownership.
Conversion was made dependent on unanimous consent, which proved practically unachievable for most occupied buildings.
There was then a circular problem: lenders and professionals had little reason to develop commonhold expertise because almost no commonholds were built, while developers were reluctant to use a tenure with so little market familiarity.
The Law Commission’s commonhold project examined these weaknesses and produced extensive recommendations for a redesigned system.
What commonhold reforms are proposed in 2026?
The government published the draft Commonhold and Leasehold Reform Bill in January 2026. Its aim is to replace and modernise much of the existing framework and establish commonhold as the default tenure for new flats.
The draft has completed pre-legislative scrutiny, and the government intends to introduce a final Bill during the 2026–27 parliamentary session. As at 31 July 2026, however, the reforms described below are not yet law, and the final provisions may change.
A ban on most new leasehold flats
The government proposes preventing most newly built or newly created flats from being sold on long residential leases. Commonhold would instead become the normal ownership structure.
Existing leasehold flats would not automatically become commonhold. Transitional rules and limited exceptions are expected, but no operative commencement date has yet been fixed.
A 50% conversion threshold
The proposed framework would reduce the present unanimous-consent obstacle. Conversion would become possible where at least 50% of qualifying leaseholders support the process.
The draft model involves collective acquisition of the freehold followed by conversion. Leaseholders who do not participate could initially remain leaseholders within the converted building, with a route to join the commonhold later.
This is considerably more complicated than simply replacing “100%” with “50%”. The final system must address the rights, costs and management position of non-participating leaseholders and any former freeholder retaining an intermediate interest.
Sections for complex developments
A new system of sections would allow different parts of a commonhold to manage and fund matters affecting only them.
For example, the flats in a mixed-use building could form one section and the commercial premises another. Owners using a particular lift, gym or heating system could be responsible for the relevant costs without involving units receiving no benefit.
Mandatory reserve funds
Every commonhold would be required to maintain a reserve fund. The owners would retain a collective say over the amount contributed, but the association could not simply decide to make no long-term financial provision at all.
The proposed rules would protect reserve funds through statutory trusts and regulate when money could be redirected or borrowed for another purpose.
Stronger voting and minority protections
The proposals would clarify decision-making, local rules and voting thresholds. Owners adversely affected by certain majority decisions would have rights to challenge them before a tribunal.
The intention is to preserve democratic control while preventing a majority from using it unfairly against a smaller group of owners.
Improved dispute resolution
The proposed framework would expand the property tribunal’s role in commonhold disputes and encourage alternative dispute resolution before formal proceedings.
This would address a weakness in the current system, under which many commonhold disputes fall outside the specialist tribunal jurisdiction available in leasehold cases.
The current proposals and official supporting documents are available in the draft Commonhold and Leasehold Reform Bill.
Should I buy a leasehold flat now or wait for commonhold?
For most buyers, waiting indefinitely is unlikely to be a practical strategy.
Commonhold property remains exceptionally rare, and the timetable for the new legislation, regulations, lender preparation and developer transition is not yet settled. Even after a new system takes effect, most existing flats will remain leasehold unless their owners actively pursue conversion.
A buyer considering an existing leasehold flat should therefore judge the property under the law and documents applying today. The important questions remain the lease length, ground rent, service charges, building condition, management quality and mortgage lender’s requirements.
A long, well-drafted lease in a properly maintained building can still provide a perfectly satisfactory home. The prospect of future commonhold reform does not automatically make every present leasehold purchase unwise.
Buyers of new-build or off-plan flats should ask more pointed questions. Establish whether the property will be leasehold or commonhold, whether the development might fall within transitional arrangements, and what happens if the legislation changes before completion.
My guide asking whether a 125-year lease is long enough explains the practical lease-length issues facing buyers under the present system.
Frequently asked questions
Can a flat be freehold in England and Wales?
Yes. A flat can be owned as a freehold commonhold unit. Ordinary freehold flats outside a valid commonhold structure can create legal and mortgage difficulties because positive obligations, such as repairing and contributing towards a shared building, do not automatically bind successive freehold owners in the same way as lease covenants.
Commonhold provides a statutory framework designed specifically to overcome that problem.
Can houses be commonhold?
Yes. Commonhold is not restricted to flats. Units can include houses, commercial premises, garages and other property within a development sharing communal land, structures or services.
In practice, its main importance lies in providing freehold ownership for flats and other interdependent properties.
Do commonhold owners pay service charges?
They pay contributions towards the association’s shared expenditure, currently called commonhold assessments, rather than service charges demanded by a landlord under a lease.
The label changes, but the underlying building still needs to be insured, repaired, cleaned and managed.
Is there ground rent in commonhold?
No. Commonhold units are freehold, and there is no landlord entitled to collect ground rent.
Can a commonhold owner sell the property?
Yes. A commonhold unit can be sold as a freehold property. The buyer becomes entitled to membership of the commonhold association and takes the unit subject to the CCS.
Outstanding debts and registered charges must be investigated before completion.
Can a commonhold flat be mortgaged?
Yes. A mortgage can be secured against the freehold unit. Because commonhold remains rare, a buyer should check the proposed lender’s criteria before committing to the purchase.
Can I rent out a commonhold unit?
Generally, yes, subject to the statutory commonhold rules, the CCS and any lawful restrictions applying to the particular unit. The owner must ensure that the tenant receives the required information and complies with the relevant commonhold obligations.
Can commonhold owners be evicted for not paying charges?
There is no lease that the association can forfeit. However, unpaid commonhold contributions can be recovered through the courts, potentially leading to a charging order and, in a serious case, an order for sale of the unit.
Is commonhold automatically better than leasehold?
Commonhold removes the wasting lease, ground rent and third-party landlord. It also gives owners direct control through their association.
It does not guarantee low bills, competent management or harmonious decision-making. A well-run commonhold is likely to offer important structural advantages over leasehold; a badly governed and underfunded commonhold can still be a difficult place to own a home.
Will my leasehold flat automatically become commonhold?
No. Neither the current law nor the proposed reforms automatically converts every existing leasehold flat.
Conversion would remain a voluntary and organised process requiring sufficient leaseholder support, acquisition or control of the freehold, legal restructuring and registration.
What commonhold changes—and what it does not
Commonhold addresses a basic unfairness in traditional flat ownership. A home need not be an asset that slowly expires, and the people paying to maintain a building need not remain legally subordinate to an outside landlord.
That is a powerful improvement, but commonhold should not be presented as effortless homeownership. Shared buildings require money, planning, compromise and sometimes firm enforcement. Those realities exist whatever name appears on the title.
The difference is that, in commonhold, responsibility and control rest principally with the homeowners themselves. For many people that will feel fairer and more rational. It also means that owners cannot simply blame the freeholder when difficult decisions have to be made.
As the law stands, commonhold remains more of a glimpse of the future than an ordinary feature of the housing market. The direction of reform is clear, but buyers and leaseholders must continue to make decisions using the system actually in force—not the more attractive one promised for a later date.
Last legally reviewed: 31 July 2026
This guide is based on general principles of English and Welsh law, is intended for informational purposes only, and does not constitute legal advice or establish a professional relationship.
