--- title: "Commonhold Reform: What It Means for Leaseholders, Resident Directors and Managing Agents" url: https://manage.management/blog/commonhold-reform-what-it-means-for-leaseholders-resident-directors-and-managing-agents description: "Understand the UK’s proposed commonhold reforms, the draft 2026 Bill, conversion from leasehold, RTM and what resident-led blocks should do now." author: "Franklin Baeza" published: 2026-09-13T13:31:36.644Z updated: 2026-10-29T12:29:37Z categories: ["Leasehold Reform","Housing Policy"] publisher: Manage.Management language: en-GB --- # Commonhold Reform: What It Means for Leaseholders, Resident Directors and Managing Agents Understand the UK’s proposed commonhold reforms, the draft 2026 Bill, conversion from leasehold, RTM and what resident-led blocks should do now. The government wants [commonhold](https://commonhold.property) to become the default way to own most new flats in England and Wales. Its 2025 Commonhold White Paper set out the policy direction, and the Draft Commonhold and Leasehold Reform Bill published in January 2026 provides the proposed legal framework. Neither makes existing leasehold flats automatically commonhold today, but together they signal a major long-term shift in how shared buildings could be owned and managed. ## Key takeaways - The draft Commonhold and Leasehold Reform Bill, published in January 2026, would make commonhold the default for new flats. - Existing leasehold flats do not become commonhold automatically. - Commonhold removes the landlord, but buildings still need budgets, reserves, insurance and good governance. - Right to Manage remains the fastest route to control for existing leaseholders. For leaseholders, resident directors, Right to Manage companies and managing agents, the practical question is not simply whether commonhold is better than leasehold. It is how to run buildings with clearer records, accountable decision-making and stronger financial controls now—while the law continues to develop. ## What is commonhold? Commonhold is a form of freehold ownership designed for flats and other interdependent buildings. Each owner holds their individual unit outright, with no expiring lease term, and every owner is automatically a member of the commonhold association that owns and manages the common parts. Instead of a third-party landlord or freeholder sitting above the flat owners, the owners collectively govern the building. The framework is intended to give homeowners more direct influence over budgets, shared costs, building rules and long-term maintenance. The building’s main rulebook is called the **Commonhold Community Statement**, or CCS. It sets out the rights and responsibilities of unit owners and the association, as well as how decisions are made and shared costs are collected. ## Why reform is proposed Commonhold is not new. It was introduced through the Commonhold and Leasehold Reform Act 2002, with the first commonhold framework taking effect in 2004. However, it has seen very limited use, partly because the legal model was too restrictive for many real-world developments, particularly more complex and mixed-use buildings. The government’s 2025 White Paper committed to a comprehensive new framework based largely on the Law Commission’s 2020 recommendations. The objective is to make commonhold more practical for homeowners, developers, lenders, conveyancers and property professionals, then make it the default tenure for most new flats. That does not mean commonhold will remove every challenge of living in a shared building. Flats will still need insurance, repairs, major works planning, a budget, a reserve fund and a workable way to resolve disagreements. The intended difference is that the people who pay for the building should have a stronger formal role in governing it. ## What is proposed The government has published a Draft Commonhold and Leasehold Reform Bill for pre-legislative scrutiny. It has not yet become law, so the detail may change before a final Bill is introduced and passed by Parliament [(gov.uk)](https://www.gov.uk/government/publications/commonhold-white-paper/commonhold-white-paper-the-proposed-new-commonhold-model-for-homeownership-in-england-and-wales). The principal proposals are: - **Commonhold as the default for most new flats:** the government is consulting on a ban on the sale of new long leasehold flats, with limited exemptions expected in cases where leasehold may remain justified or necessary [(gov.uk)](https://www.gov.uk/government/publications/commonhold-white-paper/commonhold-white-paper-the-proposed-new-commonhold-model-for-homeownership-in-england-and-wales). - **Broader use across building types:** the reformed model is intended to work more effectively in mixed-use schemes and other complex developments, not only straightforward residential blocks [(gov.uk)](https://www.gov.uk/government/publications/commonhold-white-paper/commonhold-white-paper-the-proposed-new-commonhold-model-for-homeownership-in-england-and-wales). - **Easier voluntary conversion for existing blocks:** the draft proposals would reduce the current leaseholder consent threshold for conversion from 100% to 50% [(gov.uk)](https://www.gov.uk/government/publications/commonhold-white-paper/commonhold-white-paper-the-proposed-new-commonhold-model-for-homeownership-in-england-and-wales). - **A pathway for mixed-tenure conversions:** a converted building could initially include both commonhold unit owners and leaseholders, with rules intended to support management and a route towards becoming fully commonhold over time [(gov.uk)](https://www.gov.uk/government/publications/commonhold-white-paper/commonhold-white-paper-the-proposed-new-commonhold-model-for-homeownership-in-england-and-wales). - **More flexible governance:** the proposed framework builds on standardised core rules while allowing building-specific local rules to be adopted and changed through defined voting processes. ## What this means for new flats If the proposed ban is enacted, most newly completed flats intended for sale would need to be sold through commonhold rather than as long leasehold interests. The consultation proposes broad coverage, including new-build flats, some house-to-flat conversions, some changes of use and some redevelopment projects [(gov.uk)](https://www.gov.uk/government/publications/commonhold-white-paper/commonhold-white-paper-the-proposed-new-commonhold-model-for-homeownership-in-england-and-wales). There are important boundaries. The proposals do not apply to the sale of **existing** leasehold flats, and the government does not intend to require current leaseholders to convert. Build-to-rent and social-rent buildings that remain wholly rented would also sit outside the proposed ban because individual long residential leases are not being sold [(gov.uk)](https://www.gov.uk/government/publications/commonhold-white-paper/commonhold-white-paper-the-proposed-new-commonhold-model-for-homeownership-in-england-and-wales). For buyers of future commonhold homes, the core difference is permanence: they would own their unit on a freehold basis rather than for a fixed lease term. They would also become members of the association responsible for the building’s shared areas and costs. ## What this means for existing leaseholders If you own a leasehold flat now, your tenure will not automatically change. You can continue to sell your leasehold flat, seek a lease extension where eligible, exercise rights available under current law and consider RTM or collective enfranchisement where appropriate [(gov.uk)](https://www.gov.uk/government/publications/commonhold-white-paper/commonhold-white-paper-the-proposed-new-commonhold-model-for-homeownership-in-england-and-wales). The proposed conversion reforms could make commonhold a more realistic option for some existing blocks in future. But a conversion decision will still require careful work: understanding the building’s ownership structure, leases, mortgage interests, commercial elements, financial position, arrears, insurance arrangements and resident support [(gov.uk)](https://www.gov.uk/government/publications/commonhold-white-paper/commonhold-white-paper-the-proposed-new-commonhold-model-for-homeownership-in-england-and-wales). A 50% threshold would be a significant change from the current unanimous-consent requirement, but it should not be treated as a quick or automatic route. The detail of the final legislation, supporting regulations, lender processes and professional practice will matter just as much as the headline percentage [(gov.uk)](https://www.gov.uk/government/publications/commonhold-white-paper/commonhold-white-paper-the-proposed-new-commonhold-model-for-homeownership-in-england-and-wales). ## Costs and contributions Commonhold does not mean shared building costs disappear. Roofs, lifts, communal lighting, fire-safety works, insurance, repairs and professional support still need to be paid for. Under commonhold, owners make **contributions to shared costs** through the commonhold association. The association uses those funds for the building’s running costs and, where appropriate, reserves for future major expenditure. The important distinction is governance. Commonhold is intended to give unit owners a defined role in decisions that affect budgets and the building’s rules, rather than leaving them solely in a landlord-and-leaseholder relationship. Good financial information, properly documented decisions and realistic reserve planning therefore become even more important. ## Ground rent and leases Commonhold has no ground rent because it is not based on a landlord granting a time-limited lease to the flat owner. The unit owner owns their unit freehold, while the association owns and manages the common parts. However, it is inaccurate to say that every new residential lease is already ground-rent free. The Leasehold Reform (Ground Rent) Act 2022 restricted ground rents in most new long residential leases, with exceptions and specific legal detail. Existing leaseholders remain subject to the terms of their own leases unless and until those terms are changed through a relevant legal route [(gov.uk)](https://www.gov.uk/government/publications/commonhold-white-paper/commonhold-white-paper-the-proposed-new-commonhold-model-for-homeownership-in-england-and-wales). For a current leaseholder, the immediate priorities remain practical: know your lease length, understand your ground-rent clause, check service-charge demands carefully and obtain professional advice where a lease extension, enfranchisement or dispute may be involved. ## RTM still matters Right to Manage remains highly relevant for leasehold blocks. It enables qualifying leaseholders to take over the landlord’s management functions without having to buy the freehold. It is a route to management control, not a route to outright ownership or automatic conversion to commonhold. That distinction matters. An RTM company can appoint and oversee a managing agent, manage service-charge functions and build stronger governance habits, while the flats themselves remain leasehold and the landlord’s ownership interest remains in place. For many buildings, RTM may be the most practical action available now if residents want a greater say in how their block is run. The government has also begun implementing certain RTM-related reforms under the Leasehold and Freehold Reform Act 2024 [(gov.uk)](https://www.gov.uk/government/publications/commonhold-white-paper/commonhold-white-paper-the-proposed-new-commonhold-model-for-homeownership-in-england-and-wales). Manage.Management’s RTM Toolkit helps leaseholders understand and organise the statutory process, including the steps needed to assess whether their building may qualify. It is a practical starting point for groups seeking greater management control without waiting for future commonhold legislation. ## What resident-led blocks should do now Commonhold reform is a reason to improve governance now, not a reason to pause action while legislation develops. - **Know the legal structure:** establish whether the block is traditionally managed, resident-managed, RTM, share of freehold or already operating with another form of resident control. - **Keep essential records accessible:** store leases, company documents, insurance policies, budgets, accounts, major-works papers, contractor information and meeting records in a secure shared place. - **Create a clear financial trail:** ensure owners can understand the budget, expenditure, contributions, arrears, reserve position and the reason for material decisions. - **Document decisions properly:** record director decisions, member votes, meeting minutes, approvals and communications so the block has an auditable governance history. - **Plan rather than react:** review expected maintenance, safety obligations, insurance, long-term capital works and reserve-fund needs before they become urgent. - **Build constructive owner participation:** whether or not a block ever converts to commonhold, resident engagement makes decisions easier to explain, approve and deliver. Manage.Management is designed around these operational foundations: centralised records, financial tracking, communications, issue management, meetings and voting for multi-unit residential property. Those capabilities are useful for leasehold blocks today and align closely with the transparent, homeowner-led governance that commonhold reform is intended to support. ## What managing agents should consider Commonhold would not remove the need for professional managing agents. A commonhold association can appoint an agent to carry out day-to-day management and access specialist operational support. The difference is that the agent would be appointed by, and accountable to, the association of unit owners rather than a third-party landlord. This creates an opportunity for agents who already operate with clarity and strong client service. In a more owner-led model, accessible reporting, transparent procurement, timely communication, documented approvals and clear explanations of costs are likely to become even more important. Managing agents should begin preparing for a market in which clients increasingly expect digital access to records, better collaboration with resident directors and a clear audit trail for property decisions. Those are good operational standards regardless of the eventual timetable for commonhold. ## The timeline The 2025 Commonhold White Paper established the policy direction. In January 2026, the government published the Draft Commonhold and Leasehold Reform Bill for pre-legislative scrutiny and consulted on how a future ban on most new long leasehold flats should operate. The final timetable depends on the progress of legislation through Parliament, the government’s response to consultation and the detailed implementation work needed across lending, conveyancing, development and property management. It would be premature to present a fixed commencement date as settled [(gov.uk)](https://www.gov.uk/government/publications/commonhold-white-paper/commonhold-white-paper-the-proposed-new-commonhold-model-for-homeownership-in-england-and-wales). For existing leaseholders, the immediate reality remains leasehold. The best preparation is to understand the rights available today, improve the way the building is governed and maintain the information that any future collective decision—whether RTM, enfranchisement, a managing-agent change or commonhold conversion—will require. ## Frequently asked questions ### Will my leasehold flat become commonhold automatically? No. The government does not propose to ban existing leasehold flats or force current leaseholders to convert. The proposals aim to make voluntary conversion easier for blocks that choose it [(gov.uk)](https://www.gov.uk/government/publications/commonhold-white-paper/commonhold-white-paper-the-proposed-new-commonhold-model-for-homeownership-in-england-and-wales). ### Will commonhold eliminate building charges? No. Shared buildings still have running costs, maintenance and major works. Under commonhold, owners contribute to shared costs through the commonhold association. ### Is conversion to commonhold already available? Commonhold conversion exists under the current legal framework, but it is difficult and currently requires 100% leaseholder consent. The draft 2026 proposals would reduce the leaseholder consent threshold to 50%, subject to the final legislation [(gov.uk)](https://www.gov.uk/government/publications/commonhold-white-paper/commonhold-white-paper-the-proposed-new-commonhold-model-for-homeownership-in-england-and-wales). ### Is RTM replaced by commonhold? No. RTM remains a separate statutory route for leaseholders to take over management functions without buying the freehold. It can be a practical option for qualifying blocks today. ### Can a commonhold association use a managing agent? Yes. Commonhold is not compulsory self-management. A commonhold association can appoint a professional managing agent to support the building’s day-to-day operation. ## What happens next Commonhold reform could reshape the ownership of new flats in England and Wales, but the change is still moving through the legislative process. The clearest message for current leaseholders and resident-led blocks is that good governance is valuable now, whether the building remains leasehold, exercises RTM, acquires its freehold or later chooses to convert to commonhold. Transparent finances, accessible records, clear decision-making and strong communication are not simply preparation for a future legal model. They are the foundations of a better-run building today. Last reviewed: 29 October 2026 by Franklin Baeza, Manage.Management. This article is general information for England and Wales, not legal advice. Check the current position with a qualified adviser before acting. --- Source: [Commonhold Reform: What It Means for Leaseholders, Resident Directors and Managing Agents](https://manage.management/blog/commonhold-reform-what-it-means-for-leaseholders-resident-directors-and-managing-agents) on the Manage.Management blog.