Commonhold tenure is on the government’s agenda and a preferred method by which shared new build property is to be registered as plans to phase out leasehold intensify.
Speaking at the annual Society of Licensed Conveyancers conference in Derby, Commonhold lead at Ministry of Housing Communities and Local Government Matt Prior said progress was being made on the government’s manifesto commitment to jettison the leasehold system and replace it with a fairer method of tenure for home owners. Building on the work of the Law Commission’s 2020 report into Commonhold, the government will bring forward a consultation ‘likely to be before Christmas’ said Prior, who previously was the sector lead for Home Buying and Selling and part of the Home Buying and Selling Group initiative before it later became the Home Buying and Selling Council.
Prior explained the likely responsibility on the conveyancer would be queries about how the building would be run under a commonhold community statement and what the reserve funds are. While commonhold would remain a preferred option for future tenure, Prior reiterated there would no imperative to transfer, rather inline with the government’s proclamations to date, there would be a ban on future new build leasehold.
A subsequent discussion explored the value of standardised agreement (as opposed to the current leasehold system) and the potential growth of the lender market, with John Marr from UK Finance acknowledging the ‘chicken and egg scenario currently playing out in the lending community; with some lenders already supporting with Commonhold, and some waiting for market demand to build.
Efforts to standardise tenure are to be welcomed, suggested professional indemnity insurer Howden, as Ed Donne, representative on the panel, explained greater standardisation would ultimately provide greater security for insurers.
There is a huge education issue acknowledged Laura Magezi from the Building Societies Association, a sentiment echoed by the panel; and as it stand the conversion of leasehold tenure to commonhold requires full consent from all parties; whereas the Law Commission’s proposals, which will form for the basis of the draft legislation suggested Prior, say only 50% of interested parties are needed to push the proposals forward.
Throughout the rest of the day an update on the viability of Qualified Electronic Signatures (QES) was provided by Harbinder Gill of HM Land Registry; they are now accepted but there needs to be a register of providers, much like the approved list of identity verification providers.
The conference also covered the more widespread adoption of artificial intelligence (AI), with the CLC’s deputy director of policy and regulatory standards Catherine Drennan comparing the adoption of AI to the implementation of email; acknowledging the transition would not be smooth, but the ultimate arbiter would be the consumer experience. She added the Council for Licensed Conveyancer’s have already outlined their expectations of firms when it comes to AI, with quicker admin, efficiencies, client communications, and enhanced accuracy high on the agenda for both reulaotrs and law firm. It would, she concluded, enable professionals to do away with more of the administrative elements of the role, and focus on the complex cases and clients that need attention.
2 responses
Unfortunately, I was unable to attend the conference but I did receive the following feedback from a BLG member in attendance:
“I have to say that whilst the government (Matt Prior MHCLG, speaking at the conference) appear keen to progress the move to Commonhold, there seems to be little substance as to how this will be achieved (and openly admitted that buyers don’t understand it; lenders and PI brokers are nervous about the security and developers will actively fight it). Lender attendees (from the BSA and UK Finance) as well as Howdens (PI insurer also on the panel) all seemed rather cool about the idea – the word “agnostic” was used!”
They can ‘introduce’ Commonhold all they like, we will still have the issue with defective buildings, dodgy developers and sub-standard infrastructure. Deal with that first so that people have safe homes to live in and so that warranty providers cannot weasel out of paying for defects or taking the very people who need to benefit from them to court! Time for more robust protection for people who have bought homes in good faith from developers.