Most leaseholders have heard of the Leasehold Reform Act 1967 and the Leasehold and Freehold Reform Act 2024. Fewer know the Act in between — but if you've ever exercised the Right to Manage, or gone through collective enfranchisement, you've used law this Act created.
Most leaseholders have heard of the Leasehold Reform Act 1967 and the Leasehold and Freehold Reform Act 2024. Fewer know the Act in between, but if you have ever used the Right to Manage, joined a collective enfranchisement claim or been told that a landlord cannot forfeit your lease over a small service charge debt, you have relied on law this Act created. This guide explains what the 2002 Act did, what survives today and how it connects to the 2024 Act and the 2026 draft Bill.
The Commonhold and Leasehold Reform Act 2002 received Royal Assent on 1 May 2002 and made three groups of changes: a new form of ownership called commonhold, the Right to Manage, and a set of reforms to the existing leasehold regime, including enfranchisement, service charges and forfeiture.
Commonhold lets the owner of a flat hold it as freehold, with no lease, no ground rent and no term to run down. Each owner (the “unit-holder”) owns their unit outright. The shared parts, such as the roof, stairwell and grounds, are owned and managed by a commonhold association, a company limited by guarantee whose members are the unit-holders. The rules for the building are set out in a Commonhold Community Statement, and the unit-holders pay a commonhold assessment (the equivalent of a service charge) and contribute to a reserve fund.
| Commonhold | Leasehold | |
|---|---|---|
| What you own | The unit, as freehold | A lease for a fixed term |
| Ground rent | None | Often payable |
| Lease running down | No | Yes |
| Common parts | Owned by the commonhold association | Owned by the freeholder |
| Landlord | None: the association is run by the owners | Freeholder or management company |
| Rules | Commonhold Community Statement | The lease |
On paper this solves most of the structural problems of leasehold. In practice uptake has been very small: the government itself has described the number of commonhold developments in England and Wales as small. The main reasons usually given are that converting an existing leasehold building needed the agreement of all the leaseholders and the freeholder, which was rarely achievable, and that developers building new blocks had little commercial incentive to give up the freehold and ground rent income that leasehold let them keep. Lenders and conveyancers also had little experience of the structure.
The draft Commonhold and Leasehold Reform Bill published on 27 January 2026 proposes to make commonhold the default for new flats and to ban new leasehold flats, and the government consulted on making conversion easier, with the consultation closing in April 2026. The Bill has not been introduced to Parliament, so none of this is law. See our 2026 Bill explainer, and compare with share of freehold, which keeps leases but gives owners control of the freehold.
Right to Manage (RTM) is the part of the 2002 Act most leaseholders meet. Before 2002 the only way to take control of your building’s management was to buy the freehold, which was expensive and impossible if the freeholder would not sell. RTM gave leaseholders a cheaper route: take over the management functions, such as appointing the managing agent, controlling service charges and arranging maintenance, without buying anything and without proving the freeholder had done wrong.
RTM has since been amended, most significantly by the Leasehold and Freehold Reform Act 2024, which raised the non-residential floor-area limit from 25% to 50% and removed leaseholders’ general liability for the freeholder’s costs of an RTM claim, both from 3 March 2025. The basic right, and the principle that no fault needs to be proven, come from the 2002 Act. See our Right to Manage guide for how the process works today.
The 2002 Act also amended the collective enfranchisement and lease extension regime created by the 1993 Act. As I understand it, among other things it removed the requirement that a tenant must have lived in the flat to qualify, and raised the permitted non-residential share of a building from 10% to 25%. It also moved disputes from the old Leasehold Valuation Tribunals, which are now the First-tier Tribunal, so that tenants have a specialist and accessible forum. The 25% limit still applies to collective enfranchisement today, though the 2024 Act raised it to 50% for the Right to Manage. See our collective enfranchisement guide for the current process.
These sit alongside the service charge rules in the Landlord and Tenant Act 1985 (see service charges and the commission ban).
An Act of Parliament, with Royal Assent on 1 May 2002, that introduced commonhold ownership, created the Right to Manage and changed the existing leasehold law, including enfranchisement, service charges and forfeiture.
A form of ownership in which each flat owner holds their unit as freehold, with no lease or ground rent, and the shared parts are owned and managed by a commonhold association run by the unit-holders under a Commonhold Community Statement. Very few commonholds exist.
Converting an existing leasehold building needed the agreement of everyone involved, which was rarely achievable, and developers had little incentive to forgo the freehold and ground rent income they keep under leasehold. The draft 2026 Bill proposes to make commonhold the default for new flats but is not yet law.
Yes. The Right to Manage and its enfranchisement and forfeiture provisions still operate, as amended by later legislation such as the 2024 Act.
Only in limited circumstances. Generally the unpaid amount must exceed £350 or have been outstanding for more than three years, and the Tribunal must first determine that the charge is payable. This protection comes from the 2002 Act.
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This guide is researched from official and primary sources. Check them directly before relying on any figure or date.
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