Law Commission backs leasehold reform for CLTs

Thursday 23 July 2020

The Law Commission has backed our 10 year campaign to exempt CLTs from leasehold enfranchisement, giving CLTs the ability to protect affordable homes in perpetuity. But it has rejected our proposals to make commonhold compatible with CLTs.
 
The Commission published its reports on reforms to leasehold and commonhold this week. These follow their consultation process, which we put detailed submissions into last year together with the UK Cohousing Network. You can read our responses and our wider work on leasehold and commonhold reform here.
 
In its report on leasehold enfranchisement the Law Commission has accepted all our arguments.
 
Currently people who own leasehold homes on CLT land are able to 'enfranchise', buying the freehold so they are then free of any obligations to the CLT, and free of any restrictions to keep the home affordable for future buyers.
 
Ten years ago, one of the very first campaigns for the brand new National CLT Network was to secure an exemption in the Localism Act. Unfortunately that Act only gave an exemption where CLTs (or others) obtained a Community Right to Build Order (CRBO).
 
The Law Commission has accepted that this set a precedent, and the law should now be changed so CLTs can exempt all homes without needing to go through the lengthy and complicated process of obtaining an CRBO. This would not only add protections for CLTs, but could open the door for wider exemptions, e.g. to shared owner staircasing. The Law Commission suggests that CLTs could apply for exemptions on a case-by-case basis to the relevant Tribunals in England or Wales.
 
The Commission also agreed that there should be a statutory definition of Community Led Housing, so the exemption could equally apply to cohousing communities and other forms of CLH.
 
We will be pressing the Government to legislate for this exemption in any bill on leasehold reform, and may work with Parliamentarians to promote an amendment if necessary.
 
The Law Commission also published a report on commonhold, an alternative home ownership. While we sympathise with the aim to make commonhold more, well, common, we pointed out various problems it poses for CLTs. It would be really positive if commonhold could be reforms to address those. Unfortunately, the Law Commission rejected or ignored our evidence.
 
All three residential leasehold and commonhold reports were published on 21 July 2020.
 
We will pick this up with our corporate partners Wrigleys, which submitted its own response, and with government officials if and when any reforms are enacted.
 
You can support and stay involved with our work on this by becoming a member of the National CLT Network.

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