ALEP Identifies Outstanding Questions as Commonhold Reform Moves Towards Implementation

Held at 30 Euston Square on 14 October, the conference brought together legal and valuation practitioners with representatives of HM Land Registry, Nationwide and The Property Institute. Discussions examined registration, mortgage lending, building management and the experience of residents who have already acquired their freeholds. 

ALEP Director Mark Chick said: “The direction of reform is becoming clearer. Commonhold is intended to give homeowners greater control, remove the problem of a shortening lease and provide a different framework for owning and managing flats. 

“What needs further examination is how that framework will operate in individual buildings. The test will be whether people can buy, sell, borrow, make decisions and maintain their homes with confidence.” 

We know the ambition – but the route to implementation needs greater clarity

The draft Commonhold and Leasehold Reform Bill proposes a reformed commonhold framework, easier conversion for existing buildings and a ban on leasehold for most new flats. 

The final legislation, supporting regulations and implementation arrangements will determine how those ambitions translate into practice. Developers, lenders, property professionals and HM Land Registry will need sufficient preparation time, alongside clear arrangements for developments and transactions already underway. 

We know owners will gain control - but participation needs to be sustainable

Commonhold gives owners collective responsibility for their building through a commonhold association. That creates opportunities for more direct accountability and decisions that reflect residents’ priorities.

However, buildings will need workable arrangements when owners disagree, cannot afford proposed expenditure or are unwilling to take on management responsibilities. Volunteer directors will need clear guidance, appropriate protection and access to competent professional advice. 

We know building costs will remain - but funding needs to be resilient

Changing tenure does not remove the need to maintain roofs, service lifts, insure buildings or meet safety obligations. Better management and procurement can improve outcomes, but expenditure will continue to reflect each building’s condition and needs. 

Questions remain about how reserve funds will work in practice, emergency expenditure and the treatment of unpaid contributions. Arrangements must support owners facing hardship while ensuring essential work can proceed. There must also be a clear response when an association encounters serious financial difficulties. 

We know mortgageability matters - but lenders need a dependable framework

A functioning commonhold market will require mortgage availability and consistent approaches to assessing risk. 

Lenders and valuers will need reliable information about governance, reserves, insurance, major works and arrears. Buyers must also understand the association’s financial commitments and how decisions affecting their property can be made. Standard documents and clear guidance will help the lending and conveyancing process operate efficiently. 

We know conversion must be accessible - but its full cost needs to be understood

For existing leaseholders, conversion involves more than agreeing that commonhold is desirable. Freehold acquisition, valuation, legal work, registration and mortgage requirements all contribute to the process. 

The affordability of conversion, arrangements for non-participating owners and the treatment of development rights require careful attention. Mixed-use buildings, shared ownership homes and phased developments introduce further considerations. 

We know responsibilities will transfer - but information and safeguards must follow

Residents taking control need access to funds, reconciled accounts, contracts and building safety records. 

Historic defects, unresolved remediation and outstanding liabilities must be identified clearly. Owners will need certainty about the protections and funding routes available after conversion, as well as effective remedies if essential information or money is withheld during a handover. 

Mark Chick added: “These questions provide a practical agenda for successful reform. Residents need to understand both the benefits of commonhold and the responsibilities that accompany it. 

“ALEP’s members see how blocks as shared property ownership structures operate through their direct experience of sale and purchase transactions, valuations, management decisions and also disputes. We will continue contributing that experience to help create a system that gives homeowners meaningful control and the support needed to exercise it.”