Commonhold
| Author | Christopher Jessel |
| Pages | 115-123 |
Chapter 10 Commonhold
10.1 THE COMMONHOLD SYSTEM
Commonhold is a statutory structure designed to enable positive covenants to run with freehold land. It is a system of communal ownership, influenced by the condominium system in the United States, by strata title in Australia, and by other similar structures, some called commonhold, elsewhere, but adapted to English practice. It is designed to apply to any arrangement for shared maintenance, whether of a block of flats or offices, a housing or commercial estate or a parade of shops. To date it has not been widely adopted and the government has asked the Law Commission to advise on ways in which the system could be improved; it is now under review by the Commission.
The scheme is comprised in the Commonhold and Leasehold Reform Act 2002, Part 1, together with the Commonhold Regulations 2004
The commonhold comprises two types of property, both freehold with registered titles. One is the individual unit such as a flat or house or warehouse or shop or office. That is owned by one or more individuals or by any entity capable of owning land.
The other is the common parts which are owned by the commonhold association and are used for the benefit of the members of that association. That could include the roof, foundations, entrance hall, landings and corridors of a block, any shared facilities, such as a meeting room or restaurant, a car parking area, communal
Paper 241) (2018).
116 Positive Covenants and Freehold Land
gardens or a swimming pool. The association is a limited company whose members are the owners of the units in the commonhold. The CCS and the articles of association of the company have to contain certain obligatory provisions laid down in the Regulations. They will also include other provisions specifically drafted for the circumstances of the particular commonhold. These together constitute the governing documents and create a local law for the block or estate. The legislation provides for maintenance of the common parts and for a service charge.
The commonhold will normally be designed as such by the initial developer. Although it is possible for an existing, usually leasehold, arrangement to be converted to commonhold, that needs the consent of everyone affected including mortgagees, so it is unlikely to take place. There has been very limited uptake of commonhold
10.2 MAINTENANCE AND INSURANCE
Obligations on the unit holder and the association in the nature of positive covenants are enforceable under the Commonhold and Leasehold Reform Act 2002, s 14. It is headed ‘Use and maintenance’ and provides:
(1) A commonhold community statement must make provision regulating the use of commonhold units.
(2) A commonhold community statement must make provision imposing duties in respect of the insurance, repair and maintenance of each commonhold unit.
(3) A duty under subsection (2) may be imposed on the commonhold association or the unit-holder.
Regulation 15(1) says, ‘The commonhold community statement must be in the form in Schedule 3 (commonhold community statement) or a form to the same effect’. The standard CCS, paragraphs 4.5 and 4.6 provide that the association must maintain the common parts and not alter them. Paragraph 4.5.2 says, ‘The duties imposed by this CCS in respect of the repair and maintenance of the commonhold unit are specified in paragraph 7 of annex 4’.
Section 26(b) and paragraph 4.4 provide that the association must insure the common parts. The CCS, paragraph 4.4.6 provides, ‘The duties imposed by this CCS in respect of the insurance of the commonhold unit are specified...
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