At our recent conference we discussed the Law Commission’s proposals for conversion to commonhold and in particular what may happen in relation to enfranchisement when and if it becomes the norm. There are a number of proposals around conversion and these include reducing the threshold for this from 100% (as it currently is), to as low as 50% to mirror the position in an enfranchisement claim.
This then leads on to an interesting discussion about what might happen to leaseholders in such a block that don’t vote to take part in the conversion. Will they be given a commonhold unit to replace their leasehold flat – even if they don’t want it? There is scope for some kind of human rights discussion around that point alone.
This says nothing of what might happen to those with short leases in a conversion situation – particularly, as has been suggested by the Law Commission, if conversion to a commonhold were to be made the mandatory end product from an enfranchisement claim.
In those cases, unless a workable solution is found, a flat with a short lease that did not take part (ie pay) for the freehold could be ‘gifted’ a solution to their problem – a freehold unit without having to underwrite any of the costs.
There are some solutions that we have suggested around this; the main one being that ‘legacy’ long leasehold interests must be allowed to continue in commonhold.
Whilst this might sound like a common sense approach it is not clear that government will go down this route and ALEP members will be very vocal in insisting upon this to avoid an unworkable outcomes as and when commonhold is reintroduced to the legal landscape.’
Mark Chick
20.10.2021