A third way of owning land, in addition to freehold and leasehold, that was introduced into England and Wales by the Commonhold and Leasehold Reform Act 2002. It is intended for developments in which individual properties, such as flats, houses, or shops, are owned and occupied by separate persons, but there are common parts, such as stairways and walkways, that need to remain in central ownership and to be maintained. Previously, such properties were usually held under long leases, but this had proved unsatisfactory.
Each separate property in a commonhold development is a unit; the owner is a unit-holder. The body owning the common parts is the commonhold association, a private company limited by guarantee. Each unit-holder is a member of that company. The company membership is limited to the unit-holders, and the memorandum and articles of the company must specify the land in relation to which the association exercises function, and whose business it is to own and manage the common parts. The commonhold association will also need to create a Commonhold Community Statement ( CCS) setting out the rules and regulations of the particular community. The commonhold association with its common parts and all the associated units will be registered at the Land Registry. It will be possible for leasehold developments to convert to commonhold, but only by the consent of all parties.