Office of Public Sector Information
PART 1 continued
(1) This section applies to an amendment of a commonhold community statement which redefines the extent of a commonhold unit over which there is a registered charge.
(2) The amendment may not be made unless the registered proprietor of the charge consents—
(a) in writing, and
(b) before the amendment is made.
(3) But regulations may enable a court to dispense with the requirement for consent on the application of a commonhold association in prescribed circumstances.
(4) If the amendment removes land from the commonhold unit, the charge shall by virtue of this subsection be extinguished to the extent that it relates to the land which is removed.
(5) If the amendment adds land to the unit, the charge shall by virtue of this subsection be extended so as to relate to the land which is added.
(6) Regulations may make provision—
(a) requiring notice to be given to the Registrar in circumstances to which this section applies;
(b) requiring the Registrar to alter the register to reflect the application of subsection (4) or (5).
(1) In this Part “common parts” in relation to a commonhold means every part of the commonhold which is not for the time being a commonhold unit in accordance with the commonhold community statement.
(2) A commonhold community statement may make provision in respect of a specified part of the common parts (a “limited use area”) restricting—
(a) the classes of person who may use it;
(b) the kind of use to which it may be put.
(3) A commonhold community statement—
(a) may make provision which has effect only in relation to a limited use area, and
(b) may make different provision for different limited use areas.
A commonhold community statement must make provision—
(a) regulating the use of the common parts;
(b) requiring the commonhold association to insure the common parts;
(c) requiring the commonhold association to repair and maintain the common parts.
(1) Nothing in a commonhold community statement shall prevent or restrict—
(a) the transfer by the commonhold association of its freehold estate in any part of the common parts, or
(b) the creation by the commonhold association of an interest in any part of the common parts.
(2) In this section “interest” does not include—
(a) a charge, or
(b) an interest which arises by virtue of a charge.
(1) It shall not be possible to create a charge over common parts.
(2) An instrument or agreement shall be of no effect to the extent that it purports to create a charge over common parts.
(3) Where by virtue of section 7 or 9 a commonhold association is registered as the proprietor of common parts, a charge which relates wholly or partly to the common parts shall be extinguished by virtue of this subsection to the extent that it relates to the common parts.
(4) Where by virtue of section 30 land vests in a commonhold association following an amendment to a commonhold community statement which has the effect of adding land to the common parts, a charge which relates wholly or partly to the land added shall be extinguished by virtue of this subsection to the extent that it relates to that land.
(5) This section is subject to section 29 (which permits certain mortgages).
(1) Section 28 shall not apply in relation to a legal mortgage if the creation of the mortgage is approved by a resolution of the commonhold association.
(2) A resolution for the purposes of subsection (1) must be passed—
(a) before the mortgage is created, and
(b) unanimously.
(3) In this section “legal mortgage” has the meaning given by section 205(1)(xvi) of the Law of Property Act 1925 (c. 20) (interpretation).
(1) This section applies where an amendment of a commonhold community statement—
(a) specifies land which forms part of a commonhold unit, and
(b) provides for that land (the “added land”) to be added to the common parts.
(2) The amendment may not be made unless the registered proprietor of any charge over the added land consents—
(a) in writing, and
(b) before the amendment is made.
(3) But regulations may enable a court to dispense with the requirement for consent on the application of a commonhold association in specified circumstances.
(4) On the filing of the amended statement under section 33—
(a) the commonhold association shall be entitled to be registered as the proprietor of the freehold estate in the added land, and
(b) the Registrar shall register the commonhold association in accordance with paragraph (a) (without an application being made).
(1) A commonhold community statement is a document which makes provision in relation to specified land for—
(a) the rights and duties of the commonhold association, and
(b) the rights and duties of the unit-holders.
(2) A commonhold community statement must be in the prescribed form.
(3) A commonhold community statement may—
(a) impose a duty on the commonhold association;
(b) impose a duty on a unit-holder;
(c) make provision about the taking of decisions in connection with the management of the commonhold or any other matter concerning it.
(4) Subsection (3) is subject to—
(a) any provision made by or by virtue of this Part, and
(b) any provision of the memorandum or articles of the commonhold association.
(5) In subsection (3)(a) and (b) “duty” includes, in particular, a duty—
(a) to pay money;
(b) to undertake works;
(c) to grant access;
(d) to give notice;
(e) to refrain from entering into transactions of a specified kind in relation to a commonhold unit;
(f) to refrain from using the whole or part of a commonhold unit for a specified purpose or for anything other than a specified purpose;
(g) to refrain from undertaking works (including alterations) of a specified kind;
(h) to refrain from causing nuisance or annoyance;
(i) to refrain from specified behaviour;
(j) to indemnify the commonhold association or a unit-holder in respect of costs arising from the breach of a statutory requirement.
(6) Provision in a commonhold community statement imposing a duty to pay money (whether in pursuance of subsection (5)(a) or any other provision made by or by virtue of this Part) may include provision for the payment of interest in the case of late payment.
(7) A duty conferred by a commonhold community statement on a commonhold association or a unit-holder shall not require any other formality.
(8) A commonhold community statement may not provide for the transfer or loss of an interest in land on the occurrence or non-occurrence of a specified event.
(9) Provision made by a commonhold community statement shall be of no effect to the extent that—
(a) it is prohibited by virtue of section 32,
(b) it is inconsistent with any provision made by or by virtue of this Part,
(c) it is inconsistent with anything which is treated as included in the statement by virtue of section 32, or
(d) it is inconsistent with the memorandum or articles of association of the commonhold association.
(1) Regulations shall make provision about the content of a commonhold community statement.
(2) The regulations may permit, require or prohibit the inclusion in a statement of—
(a) specified provision, or
(b) provision of a specified kind, for a specified purpose or about a specified matter.
(3) The regulations may—
(a) provide for a statement to be treated as including provision prescribed by or determined in accordance with the regulations;
(b) permit a statement to make provision in place of provision which would otherwise be treated as included by virtue of paragraph (a).
(4) The regulations may—
(a) make different provision for different descriptions of commonhold association or unit-holder;
(b) make different provision for different circumstances;
(c) make provision about the extent to which a commonhold community statement may make different provision for different descriptions of unit-holder or common parts.
(5) The matters to which regulations under this section may relate include, but are not limited to—
(a) the matters mentioned in sections 11, 14, 15, 20, 21, 25, 26, 27, 38, 39 and 58, and
(b) any matter for which regulations under section 37 may make provision.
(1) Regulations under section 32 shall require a commonhold community statement to make provision about how it can be amended.
(2) The regulations shall, in particular, make provision under section 32(3)(a) (whether or not subject to provision under section 32(3)(b)).
(3) An amendment of a commonhold community statement shall have no effect unless and until the amended statement is registered in accordance with this section.
(4) If the commonhold association makes an application under this subsection the Registrar shall arrange for an amended commonhold community statement to be kept in his custody, and referred to in the register, in place of the unamended statement.
(5) An application under subsection (4) must be accompanied by a certificate given by the directors of the commonhold association that the amended commonhold community statement satisfies the requirements of this Part.
(6) Where an amendment of a commonhold community statement redefines the extent of a commonhold unit, an application under subsection (4) must be accompanied by any consent required by section 23(1) or 24(2) (or an order of a court dispensing with consent).
(7) Where an amendment of a commonhold community statement has the effect of changing the extent of the common parts, an application under subsection (4) must be accompanied by any consent required by section 30(2) (or an order of a court dispensing with consent).
(8) Where the Registrar amends the register on an application under subsection (4) he shall make any consequential amendments to the register which he thinks appropriate.
(1) A commonhold association is a private company limited by guarantee the memorandum of which—
(a) states that an object of the company is to exercise the functions of a commonhold association in relation to specified commonhold land, and
(b) specifies £1 as the amount required to be specified in pursuance of section 2(4) of the Companies Act 1985 (c. 6) (members' guarantee).
(2) Schedule 3 (which makes provision about the constitution of a commonhold association) shall have effect.
(1) The directors of a commonhold association shall exercise their powers so as to permit or facilitate so far as possible—
(a) the exercise by each unit-holder of his rights, and
(b) the enjoyment by each unit-holder of the freehold estate in his unit.
(2) The directors of a commonhold association shall, in particular, use any right, power or procedure conferred or created by virtue of section 37 for the purpose of preventing, remedying or curtailing a failure on the part of a unit-holder to comply with a requirement or duty imposed on him by virtue of the commonhold community statement or a provision of this Part.
(3) But in respect of a particular failure on the part of a unit-holder (the “defaulter”) the directors of a commonhold association—
(a) need not take action if they reasonably think that inaction is in the best interests of establishing or maintaining harmonious relationships between all the unit-holders, and that it will not cause any unit-holder (other than the defaulter) significant loss or significant disadvantage, and
(b) shall have regard to the desirability of using arbitration, mediation or conciliation procedures (including referral under a scheme approved under section 42) instead of legal proceedings wherever possible.
(4) A reference in this section to a unit-holder includes a reference to a tenant of a unit.
(1) This section applies in relation to any provision of this Part (a “voting provision”) which refers to the passing of a resolution by a commonhold association.
(2) A voting provision is satisfied only if every member is given an opportunity to vote in accordance with any relevant provision of the memorandum or articles of association or the commonhold community statement.
(3) A vote is cast for the purposes of a voting provision whether it is cast in person or in accordance with a provision which—
(a) provides for voting by post, by proxy or in some other manner, and
(b) is contained in the memorandum or articles of association or the commonhold community statement.
(4) A resolution is passed unanimously if every member who casts a vote votes in favour.
(1) Regulations may make provision (including provision conferring jurisdiction on a court) about the exercise or enforcement of a right or duty imposed or conferred by or by virtue of—
(a) a commonhold community statement;
(b) the memorandum or articles of a commonhold association;
(c) a provision made by or by virtue of this Part.
(2) The regulations may, in particular, make provision—
(a) requiring compensation to be paid where a right is exercised in specified cases or circumstances;
(b) requiring compensation to be paid where a duty is not complied with;
(c) enabling recovery of costs where work is carried out for the purpose of enforcing a right or duty;
(d) enabling recovery of costs where work is carried out in consequence of the failure to perform a duty;
(e) permitting a unit-holder to enforce a duty imposed on another unit-holder, on a commonhold association or on a tenant;
(f) permitting a commonhold association to enforce a duty imposed on a unit-holder or a tenant;
(g) permitting a tenant to enforce a duty imposed on another tenant, a unit-holder or a commonhold association;
(h) permitting the enforcement of terms or conditions to which a right is subject;
(i) requiring the use of a specified form of arbitration, mediation or conciliation procedure before legal proceedings may be brought.
(3) Provision about compensation made by virtue of this section shall include—
(a) provision (which may include provision conferring jurisdiction on a court) for determining the amount of compensation;
(b) provision for the payment of interest in the case of late payment.
(4) Regulations under this section shall be subject to any provision included in a commonhold community statement in accordance with regulations made by virtue of section 32(5)(b).
(1) A commonhold community statement must make provision—
(a) requiring the directors of the commonhold association to make an annual estimate of the income required to be raised from unit-holders to meet the expenses of the association,
(b) enabling the directors of the commonhold association to make estimates from time to time of income required to be raised from unit-holders in addition to the annual estimate,
(c) specifying the percentage of any estimate made under paragraph (a) or (b) which is to be allocated to each unit,
(d) requiring each unit-holder to make payments in respect of the percentage of any estimate which is allocated to his unit, and
(e) requiring the directors of the commonhold association to serve notices on unit-holders specifying payments required to be made by them and the date on which each payment is due.
(2) For the purpose of subsection (1)(c)—
(a) the percentages allocated by a commonhold community statement to the commonhold units must amount in aggregate to 100;
(b) a commonhold community statement may specify 0 per cent. in relation to a unit.
(1) Regulations under section 32 may, in particular, require a commonhold community statement to make provision—
(a) requiring the directors of the commonhold association to establish and maintain one or more funds to finance the repair and maintenance of common parts;
(b) requiring the directors of the commonhold association to establish and maintain one or more funds to finance the repair and maintenance of commonhold units.
(2) Where a commonhold community statement provides for the establishment and maintenance of a fund in accordance with subsection (1) it must also make provision—
(a) requiring or enabling the directors of the commonhold association to set a levy from time to time,
(b) specifying the percentage of any levy set under paragraph (a) which is to be allocated to each unit,
(c) requiring each unit-holder to make payments in respect of the percentage of any levy set under paragraph (a) which is allocated to his unit, and
(d) requiring the directors of the commonhold association to serve notices on unit-holders specifying payments required to be made by them and the date on which each payment is due.
(3) For the purpose of subsection (2)(b)—
(a) the percentages allocated by a commonhold community statement to the commonhold units must amount in aggregate to 100;
(b) a commonhold community statement may specify 0 per cent. in relation to a unit.
(4) The assets of a fund established and maintained by virtue of this section shall not be used for the purpose of enforcement of any debt except a judgment debt referable to a reserve fund activity.
(5) For the purpose of subsection (4)—
(a) “reserve fund activity” means an activity which in accordance with the commonhold community statement can or may be financed from a fund established and maintained by virtue of this section,
(b) assets are used for the purpose of enforcement of a debt if, in particular, they are taken in execution or are made the subject of a charging order under section 1 of the Charging Orders Act 1979 (c. 53), and
(c) the reference to a judgment debt includes a reference to any interest payable on a judgment debt.
(1) A unit-holder may apply to the court for a declaration that—
(a) the memorandum or articles of association of the relevant commonhold association do not comply with regulations under paragraph 2(1) of Schedule 3;
(b) the relevant commonhold community statement does not comply with a requirement imposed by or by virtue of this Part.
(2) On granting a declaration under this section the court may make any order which appears to it to be appropriate.
(3) An order under subsection (2) may, in particular—
(a) require a director or other specified officer of a commonhold association to take steps to alter or amend a document;
(b) require a director or other specified officer of a commonhold association to take specified steps;
(c) make an award of compensation (whether or not contingent upon the occurrence or non-occurrence of a specified event) to be paid by the commonhold association to a specified person;
(d) make provision for land to cease to be commonhold land.
(4) An application under subsection (1) must be made—
(a) within the period of three months beginning with the day on which the applicant became a unit-holder,
(b) within three months of the commencement of the alleged failure to comply, or
(c) with the permission of the court.
(1) This section applies to an application under section 2 if the commonhold association for the purposes of the application already exercises functions in relation to commonhold land.
(2) In this section—
(a) the application is referred to as an “application to add land”, and
(b) the land to which the application relates is referred to as the “added land”.
(3) An application to add land may not be made unless it is approved by a resolution of the commonhold association.
(4) A resolution for the purposes of subsection (3) must be passed—
(a) before the application to add land is made, and
(b) unanimously.
(5) Section 2(2) shall not apply to an application to add land; but the application must be accompanied by—
(a) the documents specified in paragraph 6 of Schedule 1,
(b) an application under section 33 for the registration of an amended commonhold community statement which makes provision for the existing commonhold and the added land, and
(c) a certificate given by the directors of the commonhold association that the application to add land satisfies Schedule 2 and subsection (3).
(6) Where sections 7 and 9 have effect following an application to add land—
(a) the references to “the commonhold land” in sections 7(2)(a) and (3)(d) and 9(3)(f) shall be treated as references to the added land, and
(b) the references in sections 7(2)(b) and (3)(c) and 9(3)(e) to the rights and duties conferred and imposed by the commonhold community statement shall be treated as a reference to rights and duties only in so far as they affect the added land.
(7) In the case of an application to add land where the whole of the added land is to form part of the common parts of a commonhold—
(a) section 7 shall not apply,
(b) on registration the commonhold association shall be entitled to be registered (if it is not already) as the proprietor of the freehold estate in the added land,
(c) the Registrar shall make any registration required by paragraph (b) (without an application being made), and
(d) the rights and duties conferred and imposed by the commonhold community statement shall, in so far as they affect the added land, come into force on registration.
(1) Regulations may provide that a commonhold association shall be a member of an approved ombudsman scheme.
(2) An “approved ombudsman scheme” is a scheme which is approved by the Lord Chancellor and which—
(a) provides for the appointment of one or more persons as ombudsman,
(b) provides for a person to be appointed as ombudsman only if the Lord Chancellor approves the appointment in advance,
(c) enables a unit-holder to refer to the ombudsman a dispute between the unit-holder and a commonhold association which is a member of the scheme,
(d) enables a commonhold association which is a member of the scheme to refer to the ombudsman a dispute between the association and a unit-holder,
(e) requires the ombudsman to investigate and determine a dispute referred to him,
(f) requires a commonhold association which is a member of the scheme to cooperate with the ombudsman in investigating or determining a dispute, and
(g) requires a commonhold association which is a member of the scheme to comply with any decision of the ombudsman (including any decision requiring the payment of money).
(3) In addition to the matters specified in subsection (2) an approved ombudsman scheme—
(a) may contain other provision, and
(b) shall contain such provision, or provision of such a kind, as may be prescribed.
(4) If a commonhold association fails to comply with regulations under subsection (1) a unit-holder may apply to the High Court for an order requiring the directors of the commonhold association to ensure that the association complies with the regulations.
(5) A reference in this section to a unit-holder includes a reference to a tenant of a unit.
(1) A winding-up resolution in respect of a commonhold association shall be of no effect unless—
(a) the resolution is preceded by a declaration of solvency,
(b) the commonhold association passes a termination-statement resolution before it passes the winding-up resolution, and
(c) each resolution is passed with at least 80 per cent. of the members of the association voting in favour.
(2) In this Part—
“declaration of solvency” means a directors' statutory declaration made in accordance with section 89 of the Insolvency Act 1986 (c. 45),
“termination-statement resolution” means a resolution approving the terms of a termination statement (within the meaning of section 47), and
“winding-up resolution” means a resolution for voluntary winding-up within the meaning of section 84 of that Act.
(1) This section applies where a commonhold association—
(a) has passed a winding-up resolution and a termination-statement resolution with 100 per cent. of the members of the association voting in favour, and
(b) has appointed a liquidator under section 91 of the Insolvency Act 1986 (c. 45).
(2) The liquidator shall make a termination application within the period of six months beginning with the day on which the winding-up resolution is passed.
(3) If the liquidator fails to make a termination application within the period specified in subsection (2) a termination application may be made by—
(a) a unit-holder, or
(b) a person falling within a class prescribed for the purposes of this subsection.
(1) This section applies where a commonhold association—
(a) has passed a winding-up resolution and a termination-statement resolution with at least 80 per cent. of the members of the association voting in favour, and
(b) has appointed a liquidator under section 91 of the Insolvency Act 1986.
(2) The liquidator shall within the prescribed period apply to the court for an order determining—
(a) the terms and conditions on which a termination application may be made, and
(b) the terms of the termination statement to accompany a termination application.
(3) The liquidator shall make a termination application within the period of three months starting with the date on which an order under subsection (2) is made.
(4) If the liquidator fails to make an application under subsection (2) or (3) within the period specified in that subsection an application of the same kind may be made by—
(a) a unit-holder, or
(b) a person falling within a class prescribed for the purposes of this subsection.
Commonhold and Leasehold Reform Act 2002