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Commonhold and Leasehold Reform - the 2002 Act

Ownership of property in England and Wales is likely to undergo, albeit slowly, a process of significant change following the introduction, in September 2004, of a new form of effectively freehold ownership - commonhold.

The Commonhold and Leasehold Reform Act 2002 received Royal Assent (became law) on 1 May 2002 and the new rules relating to leasehold reform came into force on 26 July 2002. Part 1 of the Act which relates to commonhold itself came into force on 27 September 2004. The necessary regulations, the Commonhold Regulations 2004, took effect simultaneously. A link to these regulations may be found on the Links page.

Under the new law, all types of property within a building in multiple occupation (a flat or house, a shop or light industrial unit etc. including land, but not agricultural land) are potentially capable of being owned on the basis of commonhold.

In addition, the rules relating to leasehold enfranchisement have undergone major changes that bring many more people, and corporate entities, into qualification who were previously unable to participate.

Since 30 September 2003, there have also been changes in the law which give existing leaseholders the right to acquire the management control of their buildings without having to demonstrate fault on the landlord's part and without paying compensation - the Right To Manage.

All of the changes being made will have considerable implications for the future value of property in England and Wales both as an amenity and as an investment.

August 2009