Is a Share of Freehold the Same as a Commonhold?

Whilst they share some similarities, important practical and legal distinctions remain.

While the Government and the Law Commission continue their work on reforming the law and extending the use of commonhold as part of the framework for property ownership in England and Wales, for the time being Share of Freehold is the better understood option. These costs are owner’s responsibility and are managed by the commonhold association, i.e. they are run for the benefit of owners for owners, without profit.

As with existing models, the legal status of the property would remain as a leasehold and responsibility for the repairs and maintenance would lie with either the freehold company, or the terms and conditions laid out in the lease.

Is a share of freehold the same as a commonhold?

No, shares of freehold and commonhold are not the same. A share of freehold refers to the method of ownership where a group of owners collectively purchase the freehold of a property but hold individual leases in respect of the flat(s). The crucial element of a share of freehold is therefore that each flat owner retains a lease, and as each lease is a separate legal title there can often be differences between the leases and hence their rights and obligations may differ. Freeholders pay a ground rent, but have a long term freehold for perpetuity (999 years). This group is typically responsible for managing the building. The number of freeholders would be the same as the number of flats within the building, or up to double that number depending on the terms and conditions of the freehold agreement.

Commonhold is a separate form of property ownership introduced as an alternative to leasehold ownership, where every unit owner (100% of all the flats) owns their property outright with no lease, and all unit holders jointly manage the building through a Commonhold Association, which is a company limited by guarantee. There is a single document called the Commonhold Community Statement that serves the same purpose as a lease, outlining the rights and responsibilities of the building’s owners.

What is a Share of Freehold?

A share of freehold is when leaseholders (typically flat owners) join together to purchase the freehold (land, airspace and fabric) of their building. Usually, this involves forming a limited company or group to own the freehold estate. Each leasehold property would still be individual long-term leases with all the usual rights and obligations.

How It Works

• Flat owners purchase the freehold via a company or as joint freehold owners.
• Leases for individual flats still exist, maintaining certain rights and obligations.
• The day-to-day management of the freehold could be taken care of by the management company or the freehold held by the property owners as a company or an agent.

Benefits

• All the owners would be able to make decisions collectively about maintenance and improvements to the property as well as the building’s reserve fund.
• May result in lower ground rents and service charges, as there’s no external commercial freeholder seeking profit.
• The owners may be able to obtain long lease extensions directly from the original leaseholder(s) at minimal legal cost to extend the lease.

Challenges

• Collective management can result in disagreements among individual property owners regarding expenses and maintenance standards.
• In share of freehold properties, each flat remains a leasehold property so the terms and conditions of the lease still apply and owners are still responsible for fixed terms set out in the lease.
• The lease term would remain the same as set out in the original lease together with any subsequent variations as per leasehold legislation.

What is a Commonhold?

In the majority of cases the freehold of the Commonhold property would be held jointly by the owners, with sole freehold ownership of the part of the property that they own. It is responsible for the repairs, the building insurance and all the other things which would normally be covered by a lease and dealt with by the landlord. All owners of units are automatically members of the commonhold association, a company limited by guarantee which is owned by the members (the unit owners).

Key Features

• The company is run by the members.
• The owners may also participate in the management of the property through a commonhold association.
• The commonhold association owns the whole property and all the units pay a fair share of the costs to the association.

Benefits

• Unless all the unit holders are contributing equally to the communal costs the property values and the maintenance of the building could be compromised.
• No need for lease extensions, removing a major burden typical for those who own leasehold flats.
• Direct, democratic control over building management decisions for all individual units.

Limitations

• Limitations – The concept of commonhold ownership is rare in England and Wales and despite being introduced in 2002 there are few examples of buildings that use this system.
• Mortgage lenders often have limited options for commonhold property, making it harder to buy or sell such commonhold units.
• Commonhold requires full and consistent participation by all holders of units in the building and can be difficult where there is an inability to agree as to how costs of parts of the building owned in common and the use of facilities should be divided.
• If any unit holder owns or fails to contribute to communal costs, property values and building upkeep may suffer.

So, what’s the difference between share of freehold and commonhold?

Feature	Is a Share of Freehold the Same as a Commonhold?	Commonhold
Ownership Structure	Share of freehold is sometimes referred to as collective freehold.	Outright freehold of each unit + share in communal areas
Lease Requirements	Yes—leases still exist and govern occupation	No leases—ownership is perpetual
Legal Simplicity	More complex—dual structure of lease/company	More straightforward—one legal structure
Popularity/Availability	Widespread in flats	Rare—adoption has been slow
Long-term Benefits	Lease issues remain (extensions, terms)	No ground rent – full transparency on costs.

Ownership Structure

• Share of Freehold: Leasehold + shared freehold.
• Commonhold: Full ownership of unit + shared responsibility for common areas.

Lease Requirements

• Share of Freehold: Lease still exists.
• Commonhold: No lease.

Legal Simplicity

• Share of Freehold: Legally complex (lease + company structure).
• Commonhold: More straightforward (one legal system).

Popularity/Availability

• Share of Freehold: More common.
• Commonhold: Rare in current market.

Long-term Benefits

• Share of Freehold: Some lease-related issues remain.
• Commonhold: No lease renewal needed.

Why Share of Freehold is more common than Commonhold

Share of freehold remains prevalent because most professionals and financial institutions are familiar with leasehold law and processes. Most people in the property world are familiar with the Leasehold model and the procedures involved, whereas the commonhold model is less well understood, indeed the commonhold block model has yet to be tested in practice. However, in order to make an informed decision many will also require an understanding of the commonhold alternative, the differences between common ownership and the method of ownership of a share of freehold, and the possible benefits and pitfalls. While commonhold aims to simplify ownership, it remains largely untested in practice, introducing uncertainties around management, lender support, and dispute handling. By contrast, share of freehold is a mature, well-understood model.

The Freehold Collective’s Perspective…

While both share of freehold and commonhold grant leaseholders and property owners greater control, share of freehold is currently the more practical and accessible option for most seeking to transition from leasehold houses or existing leasehold buildings. Share of freehold is therefore the method that The Freehold Collective supports, helping groups of residential leaseholders through the collective enfranchisement process.

Anyone considering collective purchase should seek specialist legal advice for their situation—start with the Freehold Purchase Calculator or Contact Us for a Free Consultation for actionable next steps.

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Share of freehold vs commonhold FAQs

What are the disadvantages of a commonhold?

Commonhold can make mortgage arrangements trickier, relies on consistent owner participation, and can result in management conflicts if unit holders do not agree on spending or building insurance rules. If these contributions are allowed to lapse the maintenance of the common areas could be put at risk, potentially reducing the value of all the individual units.

Is share of freehold the same as shared ownership?

To help assist the many UK flat owners who are considering whether it is advisable for them to purchase the share of freehold of their property, it is crucial to advise them of the legal differences, the implications and the financial costs of leasehold compared with freehold property ownership.

Do commonhold owners have to pay ground rent or service charges like leaseholders?

Commonhold owners do not pay ground rent, but they do pay a service charge to their neighbours for the service provided for the property and the common parts. These costs are overseen by the commonhold association, which manages the related costs transparently rather than for profit.

Can a commonhold association own commercial units or parts of a converted house?

The commonhold association can consist of a mixture of residential units and commercial units. The commonhold association owns and maintains the whole building, ensuring all units contribute fairly to shared obligations.