Conveyancing body calls for more upfront commonhold information
By Monidipa Fouzder >>
(9 March 2022)
More upfront information should be made available for potential buyers of commonhold properties to ensure the alternative system of home ownership is fit for purpose, a conveyancing body has said.
Commonhold, which allows a person to own a freehold flat, and be a member of the company which owns and manages the shared areas and structures of the building, has struggled to gain traction since it was introduced in 2002.
After asking the Law Commission to come up with reforms to reinvigorate commonhold as a workable alternative to leasehold, the government consulted on proposals earlier this year.
The consultation, which closed last month, states that the government wants to retain the ‘commonhold unit information certificate’ as a key part of the conveyancing process, and ensure that buyers and sellers can quickly and affordably access the information they need.
The certificate outlines, at the date of issue, the level of arrears owed by a unit owner towards the commonhold assessment and/or arrears to an established reserve fund. The commonhold association must provide the certificate within 14 days of it being requested. The government says the certificate is important because it supports the association’s solvency by encouraging arrears to be addressed as part of the conveyancing process.
The consultation asked two questions on reforming the provision of information for the sale of a commonhold property: what the maximum fee should be for issuing a certificate and whether the sanction for missing the deadline for issuing a certificate should be no fee.
However, the Conveyancing Association, in its consultation response, says the certificate should be scrapped and replaced with a new CPE1 form.
The CPE1 form would capture information such as major expected expenditure, reserve funds, disputes, insurance and fire safety. The form should cost no more than £200. No fee should be payable if the form is received more than 10 working days after it has been paid for.
Beth Rudolf, the association’s director of delivery, said her organisation has long supported a move away from leasehold to commonhold. However, the system needs to be fit for purpose ‘to ensure commonhold is an available option and we provide the right environment for it to flourish in the future’.
(Courtesy: The Law Society Gazette)