There are many terms to learn when you're buying a home for the first time. Freehold and leasehold, which describe how a property is owned, are two you'll see a lot. But there's a third and lesser known type of ownership: commonhold.

Commonhold is new. It's an alternative to leasehold, which is the most popular way to own a flat.

What is commonhold?

Unlike leasehold, commonhold does not limit how long you will own your home. In a commonhold block of flats, each flat owner owns a share of the land the block is built on, as well as their own flat. There is no lease or landlord.

The block is jointly owned and managed by flat owners in a commonhold association. This gives all flat owners the chance to make decisions about shared areas.

In a commonhold, each flat owner helps pay for the upkeep of the block. All of the owners share the cost of any work or repairs. How much each flat owner pays is set out in a legal document called the Commonhold Community Statement (CCS). The CCS also sets out how the commonhold as a whole will be run.

What is leasehold?

A leasehold flat owner only owns the inside of their flat for a fixed period of time. They do not own the outer building or the land their home is built on. These are owned by the landlord, who is paid by the residents to maintain them. These payments are known as a service charge. Service charges can be used to keep a shared entrance hall clean, or to fix a leaking roof.

Leaseholders also need to pay ground rent to their landlord or freeholder. The amount is set in the lease. Ground rent can be from £1 to several thousand pounds per year. Some leases allow ground rents to increase over time. It is important to know how much ground rent you will be charged - both now and in the future. Your lawyer can help with this.

Key differences

Commonhold Leasehold
Ownership forever Ownership for the length of the lease. Can be extended for a fee.
Ownership of an individual flat, and a share of the land and block Ownership of a flat only. The land and building are owned by the landlord.
Commonhold association responsible for upkeep Landlord responsible for upkeep
Upkeep costs split between the residents, as set out in CCS Upkeep paid for through service charges
No ground rent Ground rent paid to landlord, as set out in the lease

If you are thinking of buying a property, your lawyer will tell you the property’s type of ownership and what this means for you. This will include the things you will need to do as owner and the costs you will need to pay now and in the future.

You may also find our article on leasehold and ground rents useful.

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Legal Choices law dictionary

Need help understanding other terms that come up when renting or leasing a house? Try the new Legal Choices law dictionary.

Your Comments

Charles Alterskye says:

Sun, 02/23/2020 - 21:36
Comment
Very useful explanations of the legal terms that define the manner popular types of multi unit/apartment are owned.
Well done Guys, this is well written & easily understood by the layman.

MRS BOTHA says:

Wed, 02/26/2020 - 22:07
Comment
Very informative information on Leasehold/Common hold property
If you own a Leasehold property flat can it be changed to Commom hold property.
Thanking You

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