Q&A - What is Commonhold?

QUESTION
I’ve been hearing a lot in the news recently about something called commonhold - what is it?

ANSWER
Historically, there have been two ways for people to own property in this country – freehold and leasehold (also known as “tenures”). A freehold property is owned in its entirety by the “freeholder” for an indefinite length of time. By contrast, a leasehold property is owned for a definite amount of time. Commonly, in a block of flats the freeholder will own the building itself (ie the common parts) and the land it is built on. The freeholder will grant several leases to the individual flats. You may have heard of leases of 99 years, for example. The lease is essentially a contract between the landlord and tenant which sets out the legal relationship between the two during the period of occupation by the tenant. In a block of flats it is common for there to be a freeholder who owns the common parts and several leaseholders who each have a lease to their individual flats. Commonhold is a new form of tenure introduced by the Government in the Leasehold and Commonhold Reform Act 2002. In simple terms, commonhold allows blocks of flats to be owned on a ‘freehold’ basis with the common parts jointly owned a managed by a “commonhold association” to which each individual flat belongs.