The interview - Commonhold expert: Chris Baker

Jamie Reid caught up with one of the country’s leading experts on Commonhold to discuss the slow take up of the system in this country and how it has worked in his native Australia for over half a century.

Q: Could you start by telling me a little bit about your background, and how you came to be in the position you are now at Davies Arnold Cooper (DAC)?
A: Certainly. I’m originally from Australia and I’ve practised law there for five years. I was working on the Gold Coast and Brisbane dealing with large-scale development projects, both residential and commercial. I came to the UK at the end of 2000 and have worked in development and investment since. I joined DAC in March 2005 off the back of working on the other side of one of DAC’s clients on a fairly large-scale mixed-use regeneration project. I was keen to get back to the mixed-use side of things, as I’d been predominately working on commercial property for some time.
Q: You are regarded as one of the leading experts on Commonhold in this country – can you explain to the layman what the system is and why you think it’s the way forward?
A: It’s a system of freehold ownership of parts of a building, that overcomes a defect in the common law which prohibits the enforcement of a positive covenant such as an obligation to maintain part of the structure of a building against a successor entitle.
It’s a form of property ownership that has existed in other jurisdictions for more than 50 years. It’s called a range of different things in other jurisdictions such as Strata Title or the Condominium system.
It offers benefits in terms of standardisation of documents and it also gets around some of the anomalies in leasehold legislation.
Q: The take up of Commonhold has been worryingly slow in England – why do you think this is and do you foresee the situation changing in the near future?
A: I don’t see it changing in the near future. I think until there is real demand from purchasers for Commonhold as a product then developers won’t go for it. There were some issues with the initial legislation that we had hoped the Government would have addressed by now and that hasn’t happened. Saying that, it is still a workable system at the moment but more could be made of it.
Q: NOTB last year hosted a Commonhold conference and the general consensus among delegates was that developers were reluctant to break the status quo of the leasehold system – would you be inclined to agree with that?
A: Yes I think developers face a wide range of different issues, from the difficulties in securing planning permission for developments through to trying to meet very significant sustainability tests and thresholds in relation to the impact of developments on the built environment. They also have to consider changes in tax and increasingly difficult market conditions at the moment. All of which are focussing the mind of developers on many other things.
Q: You have written several e-books on the subject, and obviously have experience with similar systems abroad. Has the system been better received in countries such as Australia and if so why do you think this is?
A: In Australia the system was introduced in the 1950s and came in at a time when there wasn’t a large volume of multiple-occupied buildings so there was a long tradition of long leasehold in relation to flats. Therefore it became the norm at the time when the number of multiple-occupied buildings began to rise sharply.
In Australia the legislation differs from state to state, and it has been overhauled and enhanced on several occasions, but it is the norm and people have a good understanding of their rights – and it is because of this familiarity that it is so widely accepted.
Q: So do you see Commonhold and mixed use as natural partners for future developments?
A: I think there’s a real challenge in getting take up with the legislation. It’s a shame that we haven’t had more impetus in the years since the act has come into play, and also that we haven’t seen industry bodies and the government looking at making some pro-active changes to make it work for mixed-use schemes, particularly when we are looking at producing three million houses by 2020. There are areas like the Thames Gateway for example that could be used as areas to implement new systems of land ownership rather than using the traditional way. However I very much doubt this will happen, which is a shame.
Q: Are there any pitfalls associated with Commonhold that you think people should be aware of?
A: If you are going to look at Commonhold as a solution to large mixed use then the key issue people need to be aware of here is that you can only have one Commonhold association for a particular building. However in other jurisdictions they have been able to establish ‘layer arrangements’ in which principal and subsidiary associations are formed. These enable a lot more flexibility and separation of responsibility within the scheme to particular types of occupier.
Q: Okay, well thank you very much for your time. Finally, can you tell us a bit about what you like to do to relax away from the office?
A: Well as an Australian I’m obviously a keen sportsman. I’m interested in all sorts of sports but my favourite is probably cricket. Although having recently bought a new house I think I’ll be spending a fair bit of time in the garden and learning some new gardening skills!®Å½