The Commonhold and Leasehold Reform Bill: key questions answered

Commonhold has been around for ages – why do we need a new Bill?

Commonhold has been around since 2002 but, since then, fewer than 20 commonhold schemes have been built.

The Law Commission carried out a review in 2020 and the Bill implements some of their recommendations to “reinvigorate” commonhold. The Bill has not yet been put before parliament and is still subject to consultation and pre-legislative scrutiny, but the intention is to repeal and replace Part 1 of the Commonhold and Freehold Reform Act 2002 with the new provisions contained in the Bill.

The government's aim is to make commonhold more attractive through the provisions in the Bill and ultimately ban future long residential leaseholds.

For commonhold to work, residents need to want to live in commonhold schemes – does the Bill make commonhold more attractive?

Yes, the Bill aims to make commonhold more workable by including provisions for the appointment of directors – particularly in circumstances where no one steps forward to volunteer – and allows for the appointment of professional directors.

There are also new provisions intended to give commonhold unit holders more clarity and control over the costs of running a building/estate by requiring them to approve the commonhold's budget, and requiring reserve funds to be put in place. The rules of the commonhold will be governed by articles of association and by a commonhold community statement.

The Bill also includes a simplified approval process for unit holders to make minor alterations which affect communal parts of the building, such as installing a vent from one flat through common areas.

How much residents will engage with the commonhold process remains to be seen, and some may be unwilling to take on the responsibility of, say, onerous obligations under the Building Safety Act 2022.

While the government heralds greater control for residents, unit holders may find themselves swapping payment of service charge to a landlord to manage the building for professional directors' fees to make decisions on their behalf.

What will developers make of the new Bill?

The government has included various provisions in the Bill aimed squarely at developers. Under the current commonhold legislation, developers can reserve rights over a development site to allow them to continue to develop the site when some units have been sold, which allows a developer to build in phases. However, these rights are limited to specific items from a list in the 2002 Act, which is more restrictive than the rights they would have under leasehold.

The Bill gives developers the ability to reserve any rights they need for “development business” as long as these are recorded in the commonhold community statement. This is subject for a right for unit holders to challenge any overreach.

I can see how commonhold could work in smaller buildings, but what about larger buildings or even estates?

The Bill allows buildings or estates to be divided into “sections”, and lets commonhold associations create separate heads of cost so that only those who use certain areas or services will be responsible for maintaining them and paying towards them. The idea is that this should make commonhold work for larger schemes, and even mixed-use schemes.

Does this mean commonhold is going to be rolled out for commercial properties too?

The government is clear in the consultation that there is no plan to ban commercial leases or limit when they can be granted, but does query whether mixed-use buildings – where at least one new flat is being sold – should be required to change to commonhold.

Is the Bill just for new commonholds, or can current leasehold buildings/estate convert to commonhold?

The government is very keen for existing leasehold structures to convert to commonhold, and has reduced the threshold for leaseholder consent from 100% to 50% in order to make this easier. This would involve leaseholders acquiring the freehold to their building using the existing enfranchisement regime and then converting to commonhold.

Non-consenting leaseholders' leases will be aligned to the commonhold community statement, and they will be able to participate in decision making for the commonhold. However, there are trigger points at which they'll be required to convert to commonhold – either when selling their flat or instead of extending their lease.

If the government wants commonhold to be the default tenure, what happens to new leases?

Under the Bill, new long residential leases (broadly leases of over 21 years) will be banned. The government acknowledges that there will need to be some exceptions to this but has not yet set these out.

In the same way as the ban on freehold houses in the Leasehold and Freehold Reform Act 2024, the ban does not stop new leases of flats being granted or render such a lease invalid but prevents new leases of flats being advertised, and requires a “warning notice” to be served on the grant of a new lease, setting out which statutory exemption to the ban applies.

If a new flat lease were granted in spite of these measures, the lease would not be invalidated, but the leaseholder would have a right to buy the commonhold unit at no cost, or a group of buyers could require the building to be converted to commonhold so they can acquire their units, also at no cost to them.

When will the ban come into force?

The government is still consulting on this – the consultation “Moving to Commonhold” is open until 24 April, and seeks views on when a ban should be implemented based on how long it will take various stakeholders to prepare, and whether this should be imposed at once or staggered for different interest groups: https://www.gov.uk/government/consultations/moving-to-commonhold-banning-leasehold-for-new-flats/moving-to-commonhold-banning-leasehold-for-new-flats

What other changes are proposed for leases under the Bill?

Another significant change for existing leases is the abolition of forfeiture under the Bill and its replacement with lease enforcement claims.

What are lease enforcement claims – can landlords go straight to court, or is there a new version of the section 146 process?

The Bill sets out a new, and more involved, process that landlords must go through before they can go to court for enforcement of a tenant breach of covenant.

First, the landlord must give the tenant an “explanatory statement”, notifying them that a breach has occurred, and outlining the statutory scheme which, once completed, enables the landlord to make a lease enforcement claim.

If the tenant does not admit the breach, the landlord must then go to an arbitral tribunal (if the lease allows for it) or the First-Tier Tribunal, on notice to the tenant, for a final determination that the breach has occurred. A final determination won't be made until any appeal has been determined.

Finally, the landlord must serve “a lease enforcement notice” confirming that the landlord has been through the whole enforcement process, and giving the tenant a final chance of at least 28 days to remedy the breach before they can make a lease enforcement claim.

That sounds pretty convoluted…

To be honest, there are already a large number of restrictions on forfeiting residential leases in any case, so it's not as big a shift as it might sound. The main change is in the remedies available.

So when the landlord finally gets to court, what remedies can be granted?

Remedies are subject to court discretion, but the Bill outlines two orders the court can make – a remedial order, requiring the tenant to take prescribed steps to remedy the breach, or an order of sale, which can be granted where the tenant has assigned the lease in breach of its terms.

An order for sale is seen as less draconian than forfeiture, as the tenant will retain their equity in the property, unlike in a forfeiture scenario where the tenant risks losing the lease entirely.

And what's happening on ground rents?

Ground rents were banned for new leases in 2022, but the Bill caps ground rents in existing leases at £250 reducing to zero after 40 years. This will have an immediate impact on the current investment value of freehold reversions for property investors and investors in ground rent income, with the present value impacted both by the limit on the number of years of income, and by the fact that the cap is not index-linked.

What's the likely timing for all of these changes?

Difficult to say at this very early stage. The Bill has been published for pre-legislative scrutiny, but it hasn't yet been introduced to parliament. Various elements of the Bill are still subject to the outcome of the “Moving to Commonhold” consultation.

This sounds like a huge development

Yes, this is a real sea change in how residential schemes are built and managed.

An earlier version of this article was published in Estates Gazette on 9 February 2026.

Authored by Paul Tonkin, Tim Reid and Lucy Redman.