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Commonhold and Leasehold Reform Act 2002 (c. 15)

(The document as of February, 2008)

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Commonhold and Leasehold Reform Act 2002

2002 CHAPTER 15

CONTENTS

Content
  1. Part 1

    Commonhold

    1. Nature of commonhold

      1. 1. Commonhold land

    2. Registration

      1. 2. Application

      2. 3. Consent

      3. 4. Land which may not be commonhold

      4. 5. Registered details

      5. 6. Registration in error

    3. Effect of registration

      1. 7. Registration without unit-holders

      2. 8. Transitional period

      3. 9. Registration with unit-holders

      4. 10. Extinguished lease: liability

    4. Commonhold unit

      1. 11. Definition

      2. 12. Unit-holder

      3. 13. Joint unit-holders

      4. 14. Use and maintenance

      5. 15. Transfer

      6. 16. Transfer: effect

      7. 17. Leasing: residential

      8. 18. Leasing: non-residential

      9. 19. Leasing: supplementary

      10. 20. Other transactions

      11. 21. Part-unit: interests

      12. 22. Part-unit: charging

      13. 23. Changing size

      14. 24. Changing size: charged unit

    5. Common parts

      1. 25. Definition

      2. 26. Use and maintenance

      3. 27. Transactions

      4. 28. Charges: general prohibition

      5. 29. New legal mortgages

      6. 30. Additions to common parts

    6. Commonhold community statement

      1. 31. Form and content: general

      2. 32. Regulations

      3. 33. Amendment

    7. Commonhold association

      1. 34. Constitution

      2. 35. Duty to manage

      3. 36. Voting

    8. Operation of commonhold

      1. 37. Enforcement and compensation

      2. 38. Commonhold assessment

      3. 39. Reserve fund

      4. 40. Rectification of documents

      5. 41. Enlargement

      6. 42. Ombudsman

    9. Termination: voluntary winding-up

      1. 43. Winding-up resolution

      2. 44. 100 per cent. agreement

      3. 45. 80 per cent. agreement

      4. 46. Termination application

      5. 47. Termination statement

      6. 48. The liquidator

      7. 49. Termin Compulsory purchase

      8. 61. Matrimonial rights

      9. 62. Advice

      10. 63. The Crown

    10. General

      1. 64. Orders and regulations

      2. 65. Registration procedure

      3. 66. Jurisdiction

      4. 67. The register

      5. 68. Amendments

      6. 69. Interpretation

      7. 70. Index of defined expressions

  2. Part 2

    Leasehold reform

    1. Chapter 1

      Right to manage

      1. Introductory

        1. 71. The right to manage

      2. Qualifying rules

        1. 72. Premises to which Chapter applies

        2. 73. RTM companies

        3. 74. RTM companies: membership and regulations

        4. 75. Qualifying tenants

        5. 76. Long leases

        6. 77. Long leases: further provisions

      3. Claim to acquire right

        1. 78. Notice inviting participation

        2. 79. Notice of claim to acquire right

        3. 80. Contents of claim notice

        4. 81. Claim notice: supplementary

        5. 82. Right to obtain information

        6. 83. Right of access

        7. 84. Counter-notices

        8. 85. Landlords etc. not traceable

        9. 86. Withdrawal of claim notice

        10. 87. Deemed withdrawal

        11. 88. Costs: general

        12. 89. Costs where claim ceases

      4. Acquisition of right

        1. 90. The acquisition date

        2. 91. Notices relating to management contracts

        3. 92. Duties to give notice of contracts

        4. 93. Duty to provide information

        5. 94. Duty to pay accrued uncommitted service charges

      5. Exercising right

        1. 95. Introductory

        2. 96. Management functions under leases

        3. 97. Management functions: supplementary

        4. 98. Functions relating to approvals

        5. 99. Approvals: supplementary

        6. 100. Enforcement of tenant covenants

        7. 101. Tenant covenants: monitoring and reporting

        8. 102. Statutory functions

        9. 103. Landlord contributions to service charges

      6. Supplementary

        1. 104. Registration

        2. 105. Cessation of management

        3. 106. Agreements excluding or modifying right

        4. 107. Enforcement of obligations

        5. 108. Application to Crown

        6. 109. Powers of trustees in relation to right

        7. 110. Power to prescribe procedure

        8. 1

    2. Chapter 2

      Collective enfranchisement by tenants of flats

      1. Introductory

        1. 114. Amendments of right to collective enfranchisement

      2. Qualifying rules

        1. 115. Non-residential premises

        2. 116. Premises including railway track

        3. 117. Qualifying leases

        4. 118. Premises with resident landlord

        5. 119. Proportion of tenants required to participate

        6. 120. Abolition of residence condition

      3. Exercise of right

        1. 121. Right exercisable only by RTE company

        2. 122. RTE companies

        3. 123. Invitation to participate

        4. 124. Consequential amendments

        5. 125. Right of access

      4. Purchase price

        1. 126. Valuation date

        2. 127. Freeholder's share of marriage value

        3. 128. Disregard of marriage value in case of very long leases

    3. Chapter 3

      New leases for tenants of flats

      1. Introductory

        1. 129. Amendments of right to acquire new lease

      2. Qualifying rules

        1. 130. Replacement of residence test

        2. 131. Qualifying leases

        3. 132. Personal representatives

        4. 133. Crown leases

      3. Purchase price

        1. 134. Valuation date

        2. 135. Landlord's share of marriage value

        3. 136. Disregard of marriage value in case of very long leases

    4. Chapter 4

      Leasehold houses

      1. Introductory

        1. 137. Amendments of 1967 Act

      2. Qualifying rules

        1. 138. Abolition of residence test

        2. 139. Reduction of qualifying period as tenant etc

        3. 140. Exclusion of certain business tenancies

        4. 141. Tenancies not at low rent

        5. 142. Personal representatives

        6. 143. Abolition of limits on rights after lease extension

        7. 144. Exclusion of shared ownership leases

      3. Purchase price

        1. 145. Tenant's share of marriage value

        2. 146. Disregard of marriage value in case of very long leases

        3. 147. Purchase price for enfranchisement during lease extension

      4. Absent landlords

        1. 148. Applications to be to county court

        2. 149. Valuation by leasehold valuation tribunal

    5. Chapter 5

      Other provisions about leases

      1. Service charges, administration charges etc.

        1. 150. Extending meaning of service charge and management etc

        2. 151. Consultation about service charges

        3. 152. Statements of account

        4. 153. Notice to accompany demands for service charges

        5. 154. Inspection etc. of documents

        6. 155. Liability to pay service charges: jurisdiction

        7. 156. Service charge contributions to be held in separate account

        8. 157. Service charges: minor and consequential amendments

        9. 158. Administration charges

        10. 159. Charges under estate management schemes

      2. Managers appointed by leasehold valuation tribunal

        1. 160. Third parties with management responsibilities

        2. 161. Restriction of resident landlord exception

      3. Variation of leases

        1. 162. Grounds for application by party to lease

        2. 163. Transfer of jurisdiction of court to tribunal

      4. Insurance

        1. 164. Insurance otherwise than with landlord's insurer

        2. 165. Extension of right to challenge landlord's choice of insurer

      5. Ground rent

        1. 166. Requirement to notify long leaseholders that rent is due

      6. Forfeiture of leases of dwellings

        1. 167. Failure to pay small amount for short period

        2. 168. No forfeiture notice before determination of breach

        3. 169. Section 168: supplementary

        4. 170. Forfeiture for failure to pay service charge etc

        5. 171. Power to prescribe additional or different requirements

      7. Crown application

        1. 172. Application to Crown

    6. Chapter 6

      Leasehold valuation tribunals

      1. 173. Leasehold valuation tribunals

      2. 174. Procedure

      3. 175. Appeals

      4. 176. Consequential amendments

    7. Chapter 7

      General

      1. 177. Wales

      2. 178. Orders and regulations

      3. 179. Interpretation

  3. Part 3

    Supplementary

    1. 180. Repeals

    2. 181. Commencement etc

    3. 182. Extent

    4. 183. Short title

    1. Schedule 1

      Application for registration: documents

    2. Schedule 2

      Land which may not be commonhold land

    3. Schedule 3

      Commonhold association

      1. Part 1

        Memorandum and articles of association

      2. Part 2

        Membership

      3. Part 3

        Miscellaneous

    4. Schedule 4

      Development rights

    5. Schedule 5

      Commonhold: consequential amendments

    6. Schedule 6

      Premises excluded from right to manage

    7. Schedule 7

      Right to manage: statutory provisions

    8. Schedule 8

      Enfranchisement by company: amendments

    9. Schedule 9

      Meaning of service charge and management

    10. Schedule 10

      Service charges: minor and consequential amendments

    11. Schedule 11

      Administration charges

      1. Part 1

        Reasonableness of administration charges

      2. Part 2

        Amendments of Landlord and Tenant Act 1987

    12. Schedule 12

      Leasehold valuation tribunals: procedure

    13. Schedule 13

      Leasehold valuation tribunals: amendments

    14. Schedule 14

      Repeals

An Act to make provision about commonhold land and to amend the law about leasehold property.

[1st May 2002]

Be it enacted by the Queen's most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows:--



Part 1 Commonhold

Nature of commonhold

1 Commonhold land

(1) Land is commonhold land if--

(a) the freehold estate in the land is registered as a freehold estate in commonhold land,

(b) the land is specified in the memorandum of association of a commonhold association as the land in relation to which the association is to exercise functions, and

(c) a commonhold community statement makes provision for rights and duties of the commonhold association and unit-holders (whether or not the statement has come into force).

(2) In this Part a reference to a commonhold is a reference to land in relation to which a commonhold association exercises functions.

(3) In this Part--

  • "commonhold association" has the meaning given by section 34,

  • "commonhold community statement" has the meaning given by section 31,

  • "commonhold unit" has the meaning given by section 11,

  • "common parts" has the meaning given by section 25, and

  • "unit-holder" has the meaning given by sections 12 and 13.

(4) Sections 7 and 9 make provision for the vesting in the commonhold association of the fee simple in possession in the common parts of a commonhold.



Registration

2 Application

(1) The Registrar shall register a freehold estate in land as a freehold estate in commonhold land if--

(a) the registered freeholder of the land makes an application under this section, and

(b) no part of the land is already commonhold land.

(2) An application under this section must be accompanied by the documents listed in Schedule 1.

(3) A person is the registered freeholder of land for the purposes of this Part if--

(a) he is registered as the proprietor of a freehold estate in the land with absolute title, or

(b) he has applied, and the Registrar is satisfied that he is entitled, to be registered as mentioned in paragraph (a).

3 Consent

(1) An application under section 2 may not be made in respect of a freehold estate in land without the consent of anyone who--

(a) is the registered proprietor of the freehold estate in the whole or part of the land,

(b) is the registered proprietor of a leasehold estate in the whole or part of the land granted for a term of more than than 21 years,

(c) is the registered proprietor of a charge over the whole or part of the land, or

(d) falls within any other class of person which may be prescribed.

(2) Regulations shall make provision about consent for the purposes of this section; in particular, the regulations may make provision--

(a) prescribing the form of consent;

(b) about the effect and duration of consent (including provision for consent to bind successors);

(c) about withdrawal of consent (including provision preventing withdrawal in specified circumstances);

(d) for consent given for the purpose of one application under section 2 to have effect for the purpose of another application;

(e) for consent to be deemed to have been given in specified circumstances;

(f) enabling a court to dispense with a requirement for consent in specified circumstances.

(3) An order under subsection (2)(f) dispensing with a requirement for consent--

(a) may be absolute or conditional, and

(b) may make such other provision as the court thinks appropriate.

4 Land which may not be commonhold

Schedule 2 (which provides that an application under section 2 may not relate wholly or partly to land of certain kinds) shall have effect.

5 Registered details

(1) The Registrar shall ensure that in respect of any commonhold land the following are kept in his custody and referred to in the register--

(a) the prescribed details of the commonhold association;

(b) the prescribed details of the registered freeholder of each commonhold unit;

(c) a copy of the commonhold community statement;

(d) a copy of the memorandum and articles of association of the commonhold association.

(2) The Registrar may arrange for a document or information to be kept in his custody and referred to in the register in respect of commonhold land if the document or information--

(a) is not mentioned in subsection (1), but

(b) is submitted to the Registrar in accordance with a provision made by or by virtue of this Part.

(3) Subsection (1)(b) shall not apply during a transitional period within the meaning of section 8.

6 Registration in error

(1) This section applies where a freehold estate in land is registered as a freehold estate in commonhold land and--

(a) the application for registration was not made in accordance with section 2,

(b) the certificate under paragraph 7 of Schedule 1 was inaccurate, or

(c) the registration contravened a provision made by or by virtue of this Part.

(2) The register may not be altered by the Registrar under Schedule 4 to the Land Registration Act 2002 (c. 9) (alteration of register).

(3) The court may grant a declaration that the freehold estate should not have been registered as a freehold estate in commonhold land.

(4) A declaration under subsection (3) may be granted only on the application of a person who claims to be adversely affected by the registration.

(5) On granting a declaration under subsection (3) the court may make any order which appears to it to be appropriate.

(6) An order under subsection (5) may, in particular--

(a) provide for the registration to be treated as valid for all purposes;

(b) provide for alteration of the register;

(c) provide for land to cease to be commonhold land;

(d) require a director or other specified officer of a commonhold association to take steps to alter or amend a document;

(e) require a director or other specified officer of a commonhold association to take specified steps;

(f) make an award of compensation (whether or not contingent upon the occurrence or non-occurrence of a specified event) to be paid by one specified person to another;

(g) apply, disapply or modify a provision of Schedule 8 to the Land Registration Act 2002 (c. 9) (indemnity).



Effect of registration

7 Registration without unit-holders

(1) This section applies where--

(a) a freehold estate in land is registered as a freehold estate in commonhold land in pursuance of an application under section 2, and

(b) the application is not accompanied by a statement under section 9(1)(b).

(2) On registration--

(a) the applicant shall continue to be registered as the proprietor of the freehold estate in the commonhold land, and

(b) the rights and duties conferred and imposed by the commonhold community statement shall not come into force (subject to section 8(2)(b)).

(3) Where after registration a person other than the applicant becomes entitled to be registered as the proprietor of the freehold estate in one or more, but not all, of the commonhold units--

(a) the commonhold association shall be entitled to be registered as the proprietor of the freehold estate in the common parts,

(b) the Registrar shall register the commonhold association in accordance with paragraph (a) (without an application being made),

(c) the rights and duties conferred and imposed by the commonhold community statement shall come into force, and

(d) any lease of the whole or part of the commonhold land shall be extinguished by virtue of this section.

(4) For the purpose of subsection (3)(d) "lease" means a lease which--

(a) is granted for any term, and

(b) is granted before the commonhold association becomes entitled to be registered as the proprietor of the freehold estate in the common parts.

8 Transitional period

(1) In this Part "transitional period" means the period between registration of the freehold estate in land as a freehold estate in commonhold land and the event mentioned in section 7(3).

(2) Regulations may provide that during a transitional period a relevant provision--

(a) shall not have effect, or

(b) shall have effect with specified modifications.

(3) In subsection (2) "relevant provision" means a provision made--

(a) by or by virtue of this Part,

(b) by a commonhold community statement, or

(c) by the memorandum or articles of the commonhold association.

(4) The Registrar shall arrange for the freehold estate in land to cease to be registered as a freehold estate in commonhold land if the registered proprietor makes an application to the Registrar under this subsection during the transitional period.

(5) The provisions about consent made by or under sections 2 and 3 and Schedule 1 shall apply in relation to an application under subsection (4) as they apply in relation to an application under section 2.

(6) A reference in this Part to a commonhold association exercising functions in relation to commonhold land includes a reference to a case where a commonhold association would exercise functions in relation to commonhold land but for the fact that the time in question falls in a transitional period.

9 Registration with unit-holders

(1) This section applies in relation to a freehold estate in commonhold land if--

(a) it is registered as a freehold estate in commonhold land in pursuance of an application under section 2, and

(b) the application is accompanied by a statement by the applicant requesting that this section should apply.

(2) A statement under subsection (1)(b) must include a list of the commonhold units giving in relation to each one the prescribed details of the proposed initial unit-holder or joint unit-holders.

(3) On registration--

(a) the commonhold association shall be entitled to be registered as the proprietor of the freehold estate in the common parts,

(b) a person specified by virtue of subsection (2) as the initial unit-holder of a commonhold unit shall be entitled to be registered as the proprietor of the freehold estate in the unit,

(c) a person specified by virtue of subsection (2) as an initial joint unit-holder of a commonhold unit shall be entitled to be registered as one of the proprietors of the freehold estate in the unit,

(d) the Registrar shall make entries in the register to reflect paragraphs (a) to (c) (without applications being made),

(e) the rights and duties conferred and imposed by the commonhold community statement shall come into force, and

(f) any lease of the whole or part of the commonhold land shall be extinguished by virtue of this section.

(4) For the purpose of subsection (3)(f) "lease" means a lease which--

(a) is granted for any term, and

(b) is granted before the commonhold association becomes entitled to be registered as the proprietor of the freehold estate in the common parts.

10 Extinguished lease: liability

(1) This section applies where--

(a) a lease is extinguished by virtue of section 7(3)(d) or 9(3)(f), and

(b) the consent of the holder of that lease was not among the consents required by section 3 in respect of the application under section 2 for the land to become commonhold land.

(2) If the holder of a lease superior to the extinguished lease gave consent under section 3, he shall be liable for loss suffered by the holder of the extinguished lease.

(3) If the holders of a number of leases would be liable under subsection (2), liability shall attach only to the person whose lease was most proximate to the extinguished lease.

(4) If no person is liable under subsection (2), the person who gave consent under section 3 as the holder of the freehold estate out of which the extinguished lease was granted shall be liable for loss suffered by the holder of the extinguished lease.



Commonhold unit

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11 Definition

(1) In this Part "commonhold unit" means a commonhold unit specified in a commonhold community statement in accordance with this section.

(2) A commonhold community statement must--

(a) specify at least two parcels of land as commonhold units, and

(b) define the extent of each commonhold unit.

(3) In defining the extent of a commonhold unit a commonhold community statement--

(a) must refer to a plan which is included in the statement and which complies with prescribed requirements,

(b) may refer to an area subject to the exclusion of specified structures, fittings, apparatus or appurtenances within the area,

(c) may exclude the structures which delineate an area referred to, and

(d) may refer to two or more areas (whether or not contiguous).

(4) A commonhold unit need not contain all or any part of a building.

12 Unit-holder

A person is the unit-holder of a commonhold unit if he is entitled to be registered as the proprietor of the freehold estate in the unit (whether or not he is registered).

13 Joint unit-holders

(1) Two or more persons are joint unit-holders of a commonhold unit if they are entitled to be registered as proprietors of the freehold estate in the unit (whether or not they are registered).

(2) In the application of the following provisions to a unit with joint unit-holders a reference to a unit-holder is a reference to the joint unit-holders together--

(a) section 14(3),

(b) section 15(1) and (3),

(c) section 19(2) and (3),

(d) section 20(1),

(e) section 23(1),

(f) section 35(1)(b),

(g) section 38(1),

(h) section 39(2), and

(i) section 47(2).

(3) In the application of the following provisions to a unit with joint unit-holders a reference to a unit-holder includes a reference to each joint unit-holder and to the joint unit-holders together--

(a) section 1(1)(c),

(b) section 16,

(c) section 31(1)(b), (3)(b), (5)(j) and (7),

(d) section 32(4)(a) and (c),

(e) section 35(1)(a), (2) and (3),

(f) section 37(2),

(g) section 40(1), and

(h) section 58(3)(a).

(4) Regulations under this Part which refer to a unit-holder shall make provision for the construction of the reference in the case of joint unit-holders.

(5) Regulations may amend subsection (2) or (3).

(6) Regulations may make provision for the construction in the case of joint unit-holders of a reference to a unit-holder in--

(a) an enactment,

(b) a commonhold community statement,

(c) the memorandum or articles of association of a commonhold association, or

(d) another document.

14 Use and maintenance

(1) A commonhold community statement must make provision regulating the use of commonhold units.

(2) A commonhold community statement must make provision imposing duties in respect of the insurance, repair and maintenance of each commonhold unit.

(3) A duty under subsection (2) may be imposed on the commonhold association or the unit-holder.

15 Transfer

(1) In this Part a reference to the transfer of a commonhold unit is a reference to the transfer of a unit-holder's freehold estate in a unit to another person--

(a) whether or not for consideration,

(b) whether or not subject to any reservation or other terms, and

(c) whether or not by operation of law.

(2) A commonhold community statement may not prevent or restrict the transfer of a commonhold unit.

(3) On the transfer of a commonhold unit the new unit-holder shall notify the commonhold association of the transfer.

(4) Regulations may--

(a) prescribe the form and manner of notice under subsection (3);

(b) prescribe the time within which notice is to be given;

(c) make provision (including provision requiring the payment of money) about the effect of failure to give notice.

16 Transfer: effect

(1) A right or duty conferred or imposed--

(a) by a commonhold community statement, or

(b) in accordance with section 20,

shall affect a new unit-holder in the same way as it affected the former unit-holder.

(2) A former unit-holder shall not incur a liability or acquire a right--

(a) under or by virtue of the commonhold community statement, or

(b) by virtue of anything done in accordance with section 20.

(3) Subsection (2)--

(a) shall not be capable of being disapplied or varied by agreement, and

(b) is without prejudice to any liability or right incurred or acquired before a transfer takes effect.

(4) In this section--

  • "former unit-holder" means a person from whom a commonhold unit has been transferred (whether or not he has ceased to be the registered proprietor), and

  • "new unit-holder" means a person to whom a commonhold unit is transferred (whether or not he has yet become the registered proprietor).

17 Leasing: residential

(1) It shall not be possible to create a term of years absolute in a residential commonhold unit unless the term satisfies prescribed conditions.

(2) The conditions may relate to--

(a) length;

(b) the circumstances in which the term is granted;

Pages: P.1 | P.2 | P.3 | P.4 | P.5 | P.6 | P.7 | P.8 | P.9 | P.10 | P.11 | P.12 | P.13

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