Commonhold Association Formation

What is Commonhold?

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

Commonhold is a new way of owning interdependent freehold properties, such as flats, shops and offices. It is an alternative to long leasehold ownership.

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 2004 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 for registration must be made in accordance with the Act and The Commonhold (Land Registration) Rules 2004.

What are the advantages of Commonhold?

The flat or unit will be freehold, it will not lose value as would a leasehold flat as the lease runs down
The standardisation and transparency of the documentation; there will be a unique Commonhold Community Statement for the whole building, accessible at the Land Registry, not a different lease for each flat. This will avoid any inconsistency between leases or the problems arising from defective leases.
Most important is the joint ownership and management of the building. As there is no third-party landlord, all decisions relating to the building and its costs are made for the general benefit of all the unit-holders, by the Commonhold Association, according to the democratic procedures set out in its rules.

The Commonhold Formation Process

A Commonhold Association is a company limited by guarantee with a special form of Memorandum and Articles. The name of the company must end Commonhold Association Limited. The Commonhold Association must adopt a Commonhold Community Statement (CCS), which sets out details of the Commonhold scheme.

We offer the company formation of Commonhold Associations for a fee of £195 plus Vat of £39.00 and Companies House fee of £15 giving a total price of £249.00. Our Commonhold Association Package includes the following items:

Certificate of Incorporation
Completed and Bound Memorandum and Articles (3 copies)
Draft First Board Minutes
Specimen Commonhold Community Statement.
Statutory registers, minutes section and membership certificates (Excel electronic format)

Optional Extras:

Plier Company Seal - £20
Additional Sets of Memorandum and Articles - £7.50 per set
Writing Up Statutory Registers - £50
Maintenance of Statutory Registers - from £75 per annum

The above prices exclude VAT.

We can also act as your Nominee Company Secretary and provide a Registered Office Address if required for annual fees of £95 plus vat for each service.

Commonhold Association Formation

What is Commonhold?

What are the advantages of Commonhold?

The Commonhold Formation Process

Optional Extras:

If you have any queries, please contact us for more details of how to proceed.