Commonhold

Commonhold is an alternative to leasehold ownership for blocks of flats and some estates. Instead of owning a flat on a time-limited lease from a freeholder, you own your unit outright as a “commonhold unit”, and all unit owners together form a commonhold association which owns and manages the shared parts, similar to a collective freeholder.

From a landlord’s perspective, you can still grant private tenancies, for example an assured tenancy, over a commonhold unit to residential tenants in the Private Rented Sector (PRS). Rent, tenancy conditions, permitted payments, tenancy deposits, rental standards, fit for human habitation rules, Awaab’s Law duties on damp and mould, and energy efficiency rules (including Minimum Energy Efficiency Standards (MEES) and Higher rate efficiency standards (HRAD)) all apply in the same way as for a flat held on leasehold.

The key differences sit in the background structure. There is no ground rent or risk of forfeiture for breach of a headlease, but you must comply with the commonhold community statement and pay your share of service costs and capital improvements through the association. Under the Renters’ Rights Act, your commonhold unit will still need to be on the PRS Database, and you remain answerable to the Private Rented Sector Ombudsman and the Local Housing Authority (LHA) for any enforcement action in relation to your let.