The Commonhold White Paper in the Context of Building Safety

The Commonhold White Paper

On 3 March 2025, the UK Government published its Commonhold White Paper: The proposed new commonhold model for homeownership in England and Wales (“the White Paper”).

The White Paper proposes to reform the home ownership system which currently applies in England and Wales, phasing out the ‘feudal’ leasehold system and replacing it with a commonhold structure which is akin to the system adopted in Scotland.

Leasehold, Freehold, Commonhold

At present, almost all flats in England and Wales operate on a leasehold basis which grants the owner an interest in the leasehold property for a set period of time, such as 125 years. The ‘leaseholder’ does not necessarily own the freehold interest, as this is often held by a separate third-party landlord who is called the ‘freeholder’. The landlord will typically own the structural and common parts of a residential building whilst the leaseholders (tenants) will usually only have the right to use and occupy the “premises” as defined by the terms of their lease. The basis upon which the leasehold interest is held is largely governed by the terms of the lease.

In contrast, blocks of flatted properties in Scotland are often buildings in multiple ownership, whereby each flat owner holds the heritable (freehold) interest to their respective flat. In addition, the title deeds will almost always specify parts of the building which are held as common property amongst the various owners and will state their rights and obligations regarding the ongoing maintenance and repairs of the common parts. Whilst title deeds are unique in each instance, it is often the case that each owner will have to consent to any proposed works in respect of the common parts. This is effectively the same process which has been proposed under the new commonhold model in England and Wales, whereby each flat is owned outright and the owners collectively own a share of the common parts through a ‘commonhold association’, a company that the owners are all members of and jointly control. Commonhold ownership is not an entirely new system for England and Wales and has been around since 2004, but since then fewer than 20 developments have been built and adopted the commonhold system. The White Paper encourages the conversion of existing leasehold flats to commonhold and sets out to ensure that commonhold becomes the default tenure by proposing to ban the sale of all new leasehold flats.

Access Issues and Building Safety

One does not have to look far to see that access is an inherent challenge faced by multi-ownership flatted blocks in Scotland, a problem which has been brought to the fore since the Grenfell Tower tragedy in 2017. Whilst progression of cladding remedial works has been slow throughout the whole of the UK, particular delays have also been faced throughout Scotland due to the lack of a single responsible heritable owner which developers can contact to reach agreement on remedial works, as is the case in England and Wales. Rather, in Scotland developers are faced with the onerous requirement to obtain consent from the multitude of owners within the affected building. This delay in remedial works proposes significant risk to the occupants and has in part resulted in the Scottish Government introducing the Housing (Cladding Remediation) (Scotland) Act 2024 which applies to certain multi-residential domestic buildings and enables Scottish Minsters to assess and remediate certain types of buildings with unsafe cladding without requiring the consent of the owners. 

It should be noted that in Scotland, the Tenements (Scotland) Act 2004 (the “Act”) established the Tenement Management Scheme (the “TMS”). This is a default management scheme containing provisions regarding the maintenance and repair of tenement properties in Scotland, to be relied upon where the title deeds are silent. The TMS applies in relation to ‘Scheme Property’ which includes parts of the tenement that are owned in common or maintained communally. The Act also provides a statutory right of access to any part of the tenement for maintenance and inspection purposes, subject to reasonable notice being provided. Owners of flats are granted votes under the provisions of the TMS and decisions to maintain and repair are decided on the majority outcome of the respective vote. However, effectiveness of the TMS is limited as these voting provisions will only apply where the title deeds are otherwise silent. It is also common practice in Scotland for repairs to be carried out by property factors, however in a similar order, the property factor cannot unilaterally consent to repairs without consulting the owners, unless it has been given prior authority to make such decisions on behalf of the owners.

Under the commonhold system occupants of flatted blocks may feel a new sense of empowerment, playing an active role in the decisions affecting their building. However, it is also apparent that where occupants are not like minded it could lead to delays and frustration amongst occupants, in extreme cases, this can result in the building spiralling into disrepair which can cause or exacerbate safety concerns.

The UK Government has stated it will launch a consultation to address the ban of new leasehold flats and have earmarked the second half of 2025 to publish a draft Leasehold and Commonhold Reform Bill. As such, we anticipate further developments throughout the course of the year to the practical application of this new system, in particular through the lens of building safety.

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