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With all the publicity surrounding the introduction of commonhold, it is interesting to read the views of a Gazette correspondent who takes a decidedly downbeat view. He argues that commonhold will not take off in its present form for two reasons.
First, you cannot transfer existing blocks of flats into commonhold unless each and every party with an interest in the block agrees (note that this will include all lenders – and not just L and the Ts). Second, many developers will shun commonhold if they feel that it involves them giving up a freehold reversion that may have long-term value (ie not just the ground rents or service charge commissions, but a reversion that increases in value as the leases get shorter).
Time alone will tell whether such scepticism is justified. Being equally contrary, one could argue that commonhold will allow a developer to arrange for the CA to enter into a long-term ‘sweetheart’ contract with the developer (or its nominee) for the ongoing management and insurance of the building in a way that would be far more difficult under the Landlord and Tenant legislation (for more on this see note in our October issue p5). For the letter in the Gazette see [ 2004] LSG 28 October 16.
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December 2004 |
