Expert warns Commonhold reform risks ignoring core leasehold issues
Brett Williams, a property management expert with over 35 years’ experience, has cautioned that replacing leasehold with Commonhold may not resolve the underlying problems in property management and tenure. He urges government focus on improving regulation and governance instead.
Williams, Principal of Principle Estate Management and a Fellow of The Property Institute and RICS, spoke out amid ongoing debates about leasehold reform and the government’s consideration of Commonhold as a replacement tenure model. He argues that the systemic issues in leasehold stem from poor behaviour and governance, not the tenure structure itself.
He advises the new Prime Minister and housing ministers to prioritise raising standards and accountability over wholesale legal changes, warning that Commonhold will not eliminate disputes or management challenges inherent in shared property ownership.
Concerns over tenure replacement and management challenges
The government has long sought to reform leasehold arrangements, which have been criticised for unfair practices, escalating ground rents, and complex management structures. Commonhold, introduced in the UK in 2004 but rarely used, offers an alternative where property owners collectively own and manage shared areas without a landlord.
Williams highlights that similar tenure models in Scotland have not demonstrated superior management outcomes. He emphasises that issues such as maintenance of communal areas, insurance, and neighbour disputes persist regardless of tenure type.
“Changing tenure alone will not eliminate these problems,” Williams said. “It is unrealistic to believe Commonhold will magically remove disputes, conflicts between neighbours or management challenges.” He compares tenure reform to car safety: rather than banning cars due to accidents, the focus should be on improving safety and enforcement.
Improving regulation and governance as a practical alternative
Williams calls for enhanced regulation to tackle poor practices by managing agents, developers, freeholders, and residents’ associations. He argues that better governance, transparency, and accountability would improve resident experiences more effectively than structural tenure changes.
He also points to the significant public and private costs involved in transitioning from leasehold to Commonhold, questioning whether these resources could be better spent on targeted reforms within the existing system.
“Lifts will still need maintenance, roofs will still need repairing, gardens will still need maintaining and insurance will still need arranging,” he notes, underscoring the ongoing operational demands regardless of tenure.
Implications for landlords and letting agents
For private landlords and letting agents, the debate over Commonhold versus leasehold raises questions about future regulatory environments and management responsibilities. While Commonhold may reduce some landlord roles, it could also introduce new complexities in collective decision-making and property upkeep.
Agents managing leasehold properties should monitor developments closely, as any legislative changes could impact service charges, management arrangements, and dispute resolution processes. Maintaining clear records, ensuring compliance with existing regulations, and fostering good communication with residents remain essential.
Williams’ perspective suggests that landlords and agents should prepare for incremental regulatory improvements rather than expect a rapid tenure overhaul. Staying informed about government consultations and regulatory updates will be crucial to adapt effectively.
What remains uncertain about Commonhold’s future
The government’s stance on Commonhold remains tentative, with no confirmed timeline or detailed plans for replacing leasehold. The uptake of Commonhold since its introduction has been minimal, reflecting practical and legal challenges in implementation.
Key uncertainties include how Commonhold would address existing issues such as enforcement of management standards, dispute resolution, and financial liabilities for communal maintenance. The balance between collective ownership and individual rights also requires careful consideration.
Landlords and agents should watch for forthcoming policy announcements and detailed proposals, which may clarify whether Commonhold will become a mainstream tenure or remain a niche option.
What landlords should consider now
Landlords should review their leasehold property management practices to ensure robust governance and compliance with current regulations. This includes clear communication with managing agents and residents, transparent accounting of service charges, and proactive maintenance planning.
Engaging with resident associations and understanding their concerns can help reduce disputes and improve property management outcomes. Landlords might also benefit from legal advice on leasehold rights and obligations to prepare for any regulatory changes.
Keeping abreast of government consultations and sector discussions will enable landlords and agents to anticipate changes and adapt their strategies accordingly.
Supporting landlords through tenure reform debates
The Landlord Association (TLA) offers members practical resources to manage leasehold properties effectively amid ongoing reform discussions. Through TLA’s compliance materials and guidance, landlords can better navigate the complexities of leasehold governance and service charge management.
TLA’s new property management platform, ORBIT, currently in BETA testing, aims to assist landlords and letting agents in organising property records, managing rental documentation, and recording key actions related to property maintenance and resident communications. These tools can be especially valuable in ensuring transparency and accountability in leasehold management.
Membership also provides access to updates on regulatory developments, helping landlords stay informed about potential changes to tenure law and management obligations. Exploring TLA membership and ORBIT BETA access can support landlords in maintaining compliance and preparing for future reforms.
Landlords and agents should consider how improved record-keeping and regulatory awareness can mitigate risks associated with tenure uncertainty and enhance resident satisfaction.
Leasehold reform remains a complex issue with no simple solutions. The practical focus for landlords and agents is to maintain high standards of management and stay engaged with policy developments to protect their interests and those of their tenants.
Sources: Letting Agent Today
TLA - The Landlord Association