Transitional period

The period between registration of the developer and the sale of the first unit is called the 'transitional period'. During this period s.8(4) of the Act gives the developer the option not to proceed with the commonhold title and to apply to convert the commonhold back to ordinary freehold. This option only applies to new developments, i.e. without unit holders, and can only be made against the whole of the land. The applicant must indicate on the application form (CM2) whether land is to remain registered in separate common parts and unit titles, or be amalgamated back into one title.

End of the transitional period

The transitional period ceases once a person other than the applicant for registration of the commonhold becomes entitled to be registered as the proprietor of the freehold estate in one or more of the units (see s.8(1) of the Act). This means the period comes to an end when the transfer of the unit is completed, not when it is registered at Land Registry.

Once the period comes to an end, the common parts are automatically vested in the commonhold association. and only then do the rights and duties conferred and imposed by the commonhold community statement come into force. The units that have not been sold remain in the ownership of the developer until they too are sold.

At the end of the transitional period any leases are extinguished automatically under s.7(3)(d) of the Act and any charges against the common parts are automatically extinguished under s.28(3) of the Act. Any charges affecting the units must be discharged when the units are sold, using either a form DS1, an Electronic Notification of Discharge (END) or an Electronic Discharge (ED).

The next page explains how a leasehold conversion differs from a new development.