Reinvigorating commonhold as part of the government’s shake-up of the homebuying system will succeed only if conveyancers are given sufficient time to get ready, the Law Society has said. It advised the government to stagger the introduction of commonhold as the default tenure.
Mark Evans, Society president, said the draft Commonhold and Leasehold Reform Bill and government’s commonhold consultation represented a ‘significant step’ towards this ambition. However, commonhold would only succeed ‘if it operates within the realities of the housing market, the mortgage-lending environment and the conveyancing process’.
In its consultation response Chancery Lane says that its members will need to implement new or updated systems as current systems have been built around the leasehold framework. Legal technology providers will be unable to adapt their products until the Society’s revised property forms and documents have been finalised, which in turn cannot happen until the secondary legislation is settled.
Significant training and upskilling will also be required, the Society added. ‘Commonhold ownership involves a different set of rights and responsibilities from leasehold ownership. Unit holders will be members of a corporate body, may act as directors, and participate in budget, decision-making and appointment of managing agents. Solicitors advising on purchases will need to understand and be able to explain these responsibilities clearly and accurately. This will require new forms of guidance and training courses.’
The Society advised the government to stagger implementation and introduce commonhold for wholly new residential blocks first to allow the property market to build confidence and familiarity with the new form of homeownership in a controlled way before it is extended to more complex types of development.
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