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Chapter PIM1080

Document Cited authorities 4 Cited in Related
Vincent
Published date10 April 2016
Record NumberPIM1080
CourtHM Revenue & Customs
IssuerHM Revenue & Customs
Summary

The commonhold association is a limited company and it is taxed in the same way as a flat management company, except that Section 42 Landlord and Tenant Act 1987 does not apply.

Part 1 of the Commonhold and Leasehold Reform Act 2002 (CLRA02) introduced a new form of land ownership in England and Wales. The CLRA02, together with the Commonhold Regulations SI2004/1829, provides the legal framework for commonhold and came into effect on 27 September 2004.

What is commonhold?

Commonhold is a way of owning interdependent freehold properties, such as flats, shops and offices. It is an alternative to long leasehold ownership. It is similar to successful systems that have been in use for interdependent properties elsewhere in the world for many years: for example, condominium ownership in the United States and strata titles in Australia.

A commonhold consists of individually owned but interdependent freehold properties (known as units) and common parts. In a block of flats, for example, each flat would typically be a unit and the remainder, including the structure and exterior of the block, the stairs, hallway and grounds, would be common parts. Each unit is owned by a unit-holder. The common parts are owned and managed by a commonhold association, which is a limited company, of which only the unit-holders may be members. The members will have direct ownership of the unit they own and an interest in the ownership and management of the common parts through membership of the commonhold association.

The commonhold is managed by the commonhold association in accordance with the rules of the commonhold community statement (CCS). The CCS includes provisions prescribed by the Commonhold Regulations SI2004/1829 and local rules specific to the circumstances of each commonhold.

A commonhold can only be created out of registered land and must itself be registered at Land Registry. Applications...

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