This means that commonhold could be chosen as an alternative structure for (eg) an industrial estate where the developer wishes to sell the units on a freehold basis. Under the traditional approach, if there are obligations to pay a service charge (ie positive obligations) then the developer will have the choice of either letting the units on long leases, or setting up a rent charge, or placing restrictions on the titles of all the units in respect of those positive obligations. However, if the estate is developed as a commonhold then none of that would be necessary. The obligations in respect of the service charge would automatically run with the land.

The point to appreciate, therefore, is that commonhold is not necessarily for residential development only; indeed, as we noted last month (p5) it can be especially attractive in a mixed-use development. Source: Stephenson Harwood.  © Practical Lawyer