leasehold
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leasehold, lease, leases, extension, extend, leasehold, reform, collective, enfranchisement, chartered, surveyors, landlord, brighton, worthing, littlehampton, west, sussex
This is a new form of ownership for flats as an alternative to leasehold, and eventually its replacement. The Act does not provide any compulsory transfer to the new system nor any formal end to leasehold; the new system of commonhold is introduced as matter of choice for developers building flats, there is also means for conversion from leasehold to a commonhold.
In a commonhold the owners of the flats (the "unit-holders") will own their own flats on a freeheld basis and their title-deed will also give them membership of the Commonhold Association which will own the land, the structure of the building and the common parts. All unit-holders will have a vote in the operation of the Commonhold Association and, thereby, the management, maintenance, repair and servicing of the building. There will be no separate landlord, the unit-owners will share ownership and management of the building through the Commonhold Association.
The practical management and governance of the building will be according to the Commonhold Community Statement, agreed and produced by the Commonhold Association. This, in effect, replaces the lease in setting the conditions of occupancy and will be a public document, registered at the Land Registry.
Where a group of leaseholders have already brought their freehold they will be able to convert to a Commonhold arrangement subject to the consent of 100% of flat-owners in the building.
the introduction of a statutory Right to Manage for long leaseholders. changes to the qualification criteria for collective enfranchisement and lease renewal to broaden the range of applicants and simplify the valuation process provision of additional rights and protections to leaseholders regarding service charges and management.
A major source of enquiries for some time at LEASE relate to complaints regarding service charge abuses and overcharging , mis-management and neglect of properties by landlords. Problems are also caused by missing landlords, especially when tenants need to insure their building and this can be a stumbling block when selling their flats. The Act allows the tenants to address these problems by giving them power to manage themselves without the need to purchase the freehold or prove fault on the part of the landlord as would be the case if they were applying for a management order under the Landlord and Tenant Act 1987. It is a step towards recognising the much higher degree of investment or "equity interest" that tenants have in a building as compared to that of the landlord.
A right, upon service of a notice by the requisite number of qualifying tenants, to take over the management of the building, with no requirement to prove fault on the part of the landlord.
The qualifying criteria are that : the building or part of the building must be self-contained and contain at least two or more flats and two-thirds of the flats must be held by qualifying tenants (that is long leaseholders, being in most cases leases with terms originally granted in excess of 21 years) and no more than 25% of the internal floor areas (excluding common areas) to be in non-residential use. (Local Authority properties are exempt from the right to manage but Housing Associations are not)
The first step is for the tenants to set up a Right to Manage Company ('the RTM Company') and for that company to serve a Claim Notice on the landlord.