198 lines
5.3 KiB
Plaintext
Executable File
198 lines
5.3 KiB
Plaintext
Executable File
property
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propertyadvice
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propertyclinic
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7863470
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-----
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# Need to know: commonhold
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## Continuing the series in which our Clinic experts provide a guide to those
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thorny issues that can trip up the unwary. This week, David Fleming discusses
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the pros and cons of commonhold.
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![Commonhold: Tower of London][1]
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999-year leases: except for the Tower of London, few buildings last this long
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Photo: ALAMY
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By David Fleming 10:00AM BST 01 Jul 2010
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[Comments][2]
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**What is "commonhold"?**
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It was introduced in 2002 as an entirely new way of owning a building divided
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into flats or commercial units. A "**[commonhold][3]** association" acquires
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the freehold interest and, instead of a lease, a "commonhold community
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statement" governs the rights and obligations of the owners of the units. The
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association is democratic; each owner has a vote and what needs to be done, in
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terms of repairs, service charges and so on, is decided by majority.
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**Does it work?**
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## Related Articles
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* [The rights of the commonhold man][4]
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02 Feb 2002
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* [Word on the street][5]
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20 Aug 2003
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* [A new lease of life?][6]
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01 May 2002
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* [How to choose a new boiler][7]
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23 Jun 2010
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* [Need to know: fire protection][8]
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09 Jun 2010
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* [Need to know: downsizing][9]
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28 May 2010
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Unfortunately, the high hopes for this new form of ownership have not been
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met. There are very few commonhold schemes. Probably the main reason is the
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natural conservatism of the home-buying public in general and the legal
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profession in particular. Most people are understandably reluctant to risk
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their life savings on an untried system and many lenders have taken a similar
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view. For example, neither Santander nor Birmingham Midshires will normally
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lend on commonhold units, which obviously affects their marketability.
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**So is it a dead duck?**
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No, I think it must have a future for this reason. When flat owners buy their
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freehold, through a company, they generally grant themselves 999-year leases.
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Except for the Tower of London, few buildings last that long, and I anticipate
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that, at some point, there will be considerable problems where the
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overwhelming majority of the owners wish to have their building demolished but
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cannot do so because one or two people object. With a commonhold arrangement,
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a majority vote would allow the redevelopment to go ahead.
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**What would it take to make commonhold successful?**
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Public suspicion must be overcome. Realistically, that is going to take new
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legislation requiring all new blocks of flats and similar developments to be
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sold on a commonhold basis. The commonhold system itself also needs improving.
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Perhaps the biggest drawback is that the commonhold association can never
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forfeit a unit where the owner is in breach of the provisions of the
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commonhold community statement. This means it is very hard to recover service
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charges.
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The situation is different when flat owners have acquired the freehold of
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their building, which the Commonhold and Leasehold Reform Act 2002 also
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encouraged, very successfully.
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Its provisions made it much more difficult to threaten forfeiture of a lease
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but it is possible. A large part of my own practice consists of suing flat
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owners for not paying their service charges (often on behalf of freehold
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companies owned by the residents), and it is often the threat of forfeiture
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that makes them pay.
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* Send your property problems to: Property Clinic, The Daily Telegraph, 111
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Buckingham Palace Road, London SW1W 0DT email
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[propertyclinic@telegraph.co.uk][10]
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* Our experts regret that they cannot answer readers' letters personally.
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All correspondence should be sent to them at the address given above. We
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regret that we cannot acknowledge letters. Please keep them brief
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[X][11] Share & bookmark
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[What are these?][12]
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* Share: [Share][11] [ ][13] [ ][14]
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[Tweet][15]
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http://www.telegraph.co.uk/property/propertyadvice/propertyclinic/7863470
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/Need-to-know-commonhold.html
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Telegraph
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## [Property Clinic][16]
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* ### [Lifestyle »][17]
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* ### [Property »][18]
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* ### [Property Advice »][19]
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In property
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[![Twenty-four-hour party people: noisyneighbours can turn even the loveliest
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of houses into a waking nightmare][20] ][21]
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### [Property clinic: Noisy neighbours][21]
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[![House Doctor DIY: whether you are papering walls or ceilings, it pays to
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have a helper at hand, says David Snell][22] ][23]
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### [Doctor in the House: wallpaper worries][23]
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[![I spy: neighbours are not responsible for subcontractors
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][24] ][25]
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### [Property clinic: How responsible are our neighbours?][25]
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[![Building regulations and energy efficiency: The new elemental U values
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applies to flat roofs, external walls, glazing and roof lights][26] ][27]
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### [Building regulations and energy efficiency][27]
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[X][11] Share & bookmark
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Delicious Facebook Google Messenger Reddit Twitter
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Digg Fark LinkedIn Google Buzz StumbleUpon Y! Buzz
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[What are these?][12]
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Share:
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* [ ][11]
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* [ ][13]
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* [ ][14]
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* [Tweet][15]
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* Advertisement
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![][28]
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telegraphuk
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Please enable JavaScript to view the [comments powered by Disqus.][29] [blog
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comments powered by Disqus][30]
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