Essential Documents

Commonhold must be created out of a registered absolute freehold title. It cannot exist in unregistered land. If the freehold land is not already registered at Land Registry, then an application to register it must be made.

The other essential precondition for the creation of a commonhold is the need to create a commonhold association.

Commonhold Association

A commonhold association is a private company incorporated under the Companies Act 2006, and limited by guarantee rather than by shares.

The association is responsible for the upkeep of the common parts and levies a service charge to meet its expenses. The conduct of the association's meetings and general business is governed by strict regulation. Unit holders are members of the association and have voting rights at meetings.

Three documents form the constitution of the commonhold:

• The memorandum of association of the commonhold association;
• The articles of association of the commonhold association; and
• The commonhold community statement.

The memorandum of association is a short document setting out the intention of the subscribers to form a company and become members. Since 1 October 2009 there is no requirement to send this to the Registry. The articles of association contain a statement that the object of the company is to be a commonhold association, and regulate the internal organisation and affairs of the community association, such as voting powers. The commonhold community statement sets out the management framework and the rules of the association.