Commonhold Explained: More Control for Flat Owners - and More Responsibility

For generations, buying a flat in England and Wales has usually meant buying a leasehold interest. You own the right to occupy the flat for the remaining term of the lease, while a separate freeholder owns the building and land.

Commonhold offers a different model. It allows an individual flat to be owned as a freehold property, with the flat owners collectively owning and managing the shared parts of the building.

The Government wants commonhold to become the standard form of ownership for most new flats. It could give owners considerably more control, but it is important to understand that the responsibilities and costs of running a building do not disappear. They move into the hands of the owners themselves.

What is commonhold?

Under commonhold, each flat is known as a unit and its owner holds the freehold of that unit outright. There is no lease counting down and no separate freeholder above the individual owners.

The communal areas - such as the roof, structure, corridors, lifts, gardens and shared services - are owned by a commonhold association. This is a company limited by guarantee and every unit owner automatically becomes a member.

The building is governed by a Commonhold Community Statement, often shortened to CCS. This acts as the building’s rule book, setting out the rights and responsibilities of the unit owners and the commonhold association. It can also contain local rules dealing with matters specific to that development.

This should not be confused with a “share of freehold”. In a share-of-freehold arrangement, the individual flats normally remain leasehold even though the leaseholders collectively own the freehold. Commonhold removes the underlying residential leases altogether.

What could flat owners gain?

The attraction of commonhold is easy to understand.

• The ownership of the flat does not reduce in length over time.

• There should be no need to pay for a lease extension.

• Commonhold units do not carry ground rent.

• Owners have a direct say in how their building is managed.

• Owners can vote on budgets, improvements and the appointment of managing agents.

• The traditional leasehold remedy of forfeiture does not apply.

For buyers, this could eventually remove some familiar concerns surrounding short leases, escalating ground rents and limited influence over how a block is run.

However, greater control does not necessarily mean lower costs or less administration.

What responsibilities would owners take on?

The commonhold association is responsible for managing, maintaining and insuring the shared parts of the building. It must prepare budgets, collect contributions, arrange repairs and ensure that the building meets its legal obligations.

Some unit owners may also become directors of the association. Those directors would have formal responsibilities associated with running a company, including keeping records, filing accounts, acting with reasonable care and managing conflicts of interest.

Larger or more complex developments are likely to employ professional managing agents. Nevertheless, appointing an agent does not remove the need for owners to remain involved, scrutinise decisions and ensure that the building is being managed and funded properly.

This becomes particularly important in taller buildings where fire safety and building-safety legislation can create significant and specialist responsibilities.

Do service charges disappear?

No. This is one of the most important points for flat owners to understand.

Under commonhold, conventional leasehold service charges are replaced by contributions to shared costs. These contributions pay for the day-to-day running of the building, insurance, maintenance, professional services and repairs.

The proposed framework would give owners a vote on the annual budget. It also provides for reserve funds so that money can be set aside for major future works, such as replacing a lift or repairing a roof.

The terminology and decision-making process may change, but the building still has to be paid for. A well-run commonhold will therefore need realistic budgets, properly funded reserves and owners who are prepared to support necessary expenditure.

What happens if another owner does not pay?

Collective ownership also creates a degree of shared financial exposure.

If one unit owner does not pay their contribution, the commonhold association will need to take enforcement action. While that process is underway, the association must still meet the building’s bills. In practice, prolonged arrears could place additional pressure on its finances and, indirectly, on the other owners.

This makes the financial health of the commonhold association an important consideration for buyers. Its accounts, reserve funds, contribution arrears and plans for major works should be examined carefully as part of the purchase process.

What does commonhold mean for landlords?

A landlord who owns a commonhold flat would remain a unit owner and a member of the commonhold association, even though a tenant occupies the property.

The landlord would therefore retain responsibility for contributions and for complying with the ownership obligations contained in the Commonhold Community Statement. They would also need to make sure that their tenancy arrangements and tenant information reflect any relevant building rules.

For landlords considering buying a flat, the management and financial position of the building will remain just as important as the condition and rental prospects of the individual property.

Will existing leasehold flats automatically become commonhold?

No.

The proposed reforms are intended to make commonhold the default tenure for most newly built flats once the new legal framework has been introduced. Existing leasehold flats would remain leasehold unless the owners complete a voluntary conversion process.

The draft legislation proposes making conversion easier, including reducing the level of leaseholder support needed to begin the process from the current requirement for unanimous agreement. Conversion would still involve legal, financial and practical steps and should not be treated as automatic.

Has the law already changed?

Commonhold has legally existed in England and Wales since 2002, but it has been used only rarely.

The Government published the Draft Commonhold and Leasehold Reform Bill in January 2026. It has since undergone pre-legislative scrutiny, but the proposed new framework has not yet been enacted and its final detail may change as the legislation passes through Parliament.

Flat owners do not need to take immediate action simply because the draft Bill has been published. They should, however, remain aware of the reforms—particularly if they are planning to buy, sell, remortgage or collectively take greater control of their building.

Questions buyers should ask

Whether a flat is leasehold or commonhold, buyers should look beyond the front door and understand how the whole building is managed.

Useful questions include:

• Who is responsible for managing the building?

• What are the current annual charges or contributions?

• Is the reserve fund sufficient for anticipated major works?

• Are any owners in arrears?

• Are significant repairs or improvements planned?

• Are the accounts, insurance and safety records up to date?

• Are there any ongoing disputes?

• What rules apply to the use or letting of the property?

The bottom line

Commonhold could offer flat owners a more permanent and democratic form of ownership. It removes the diminishing lease and gives owners a direct voice in the management of their building.

But it should not be presented as ownership without shared bills or obligations. The success of any commonhold will depend on good governance, responsible budgeting, adequate reserve funds and owners being willing to participate in collective decisions.

For buyers, sellers and landlords, understanding both sides of that equation will be essential.

Information correct at 26 August 2026. This article is for general information only and does not constitute legal advice. Anyone considering purchasing, selling or converting a property should obtain advice appropriate to their individual circumstances.

Sources and further reading

• Draft Commonhold and Leasehold Reform Bill — GOV.UK

• Commonhold White Paper — GOV.UK

• Moving to commonhold: banning leasehold for new flats — GOV.UK

• Pre-legislative scrutiny of the Draft Commonhold and Leasehold Reform Bill — UK Parliament

• What Commonhold Means for Flat Owners — Landlord Today