The Conveyancing Association (CA) has issued its formal response to the government consultation entitled, ‘Reforming the leasehold and commonhold systems in England & Wales’.
The consultation – which ended on 22 February – sought views on a number of reforms to the leasehold and commonhold system following recommendations in the Law Commission’s reports published in July 2020 which looked at broadening access to enfranchisement (buying the freehold), the ‘right to manage’ a building or converting to Commonhold.
In its response, the CA supports the proposals to increase the ‘non-residential limit’ within buildings from 25% to 50% allowing leaseholders in buildings with up to 50% non-residential floorspace to buy their freehold or claim a right to manage.
The CA believes this provides leaseholders in such buildings with greater choice ‘especially where they feel exploited by the freeholder or the managing agent’. It does not believe there should be exemptions for any individuals, organisations or types of properties to this increase to 50%.
The Consultation also had recommendations that: allow leaseholders to require a landlord take on leases for any non-participating units following a collective enfranchisement; introduce a non-residential limit for individual freehold acquisitions; and changes to voting rights in right to manage companies.
The CA strongly supports these recommendations on the grounds of providing greater fairness to all leaseholders and property owners, and ensuring greater say in the management of their properties.
For Commonholds, the CA is calling for the scrapping of the Commonhold Unit Information Certificate (CUIC), which only provides the amount of maintenance payment which is required from the property owner, and the development of a CPE1 form to be delivered for the sale of a unit within a commonhold building.
The CPE1 would capture all necessary information such as major anticipated expenditure, reserve funds, disputes, insurance and fire safety. The CA believe the CPE1 form should attract no more than the cost of the work to provide it, to a maximum fee of £200. The Association also believes that no fee should be payable for either a CUIC or a CPE1 if it is delivered later than 10 working days after payment has been made for it.
The CA also strongly supports the proposal put forward which suggests, where Shared Ownership providers are liable for paying for repair and maintenance during an ‘Initial Repair Period’ of a new Shared Ownership lease, they should have the right to vote on matters relating to these works and their costs. It also supports the proposal to allow Shared Ownership providers the right to delegate this right over decision-making to the shared owner, should they wish to do so.
Beth Rudolf (pictured), director of delivery at The Conveyancing Association, said: “The CA is incredibly supportive of many of the proposals outlined in this consultation as they will allow existing leaseholders to pursue their enfranchisement rights, and provide them with a much fairer system which includes greater levels of choice and control.
“At present, as we know, many leaseholders are stuck in limbo and it is therefore imperative that such proposals become law in order to help extricate them from their situation and to deliver fairness for the future. We have long supported a move away from leasehold to Commonhold and we also need this to be fit for purpose in order to ensure Commonhold is an available option and we provide the right environment for it to flourish in the future.”
