The new Commonhold regime under the draft Commonhold and Freehold Reform Bill includes reform to the way a Commonhold Association (CA) is run. When it comes to comparing a Commonhold Assocation with a Resident owned Freehold Company (FC), any new advantages will be a factor in enticing conversion or attracting buyers to Commonhold. 

As with Right to Manage companies, a CA's articles of association are prescribed by statute. An FC incorporated for an enfranchisement claim or other freehold purchase, is however not required to be in a particular form. This can lead to sole directors, concentration of power, and failure of the company, with a lack of recourse outside of complex and procedural company law. Both FCs and Right to Manage companies are also limited by the lease terms specific to their building. A CA on the other hand, will be governed by the standardised statutory regime across all Commonhold developments. 

A CA under the proposed regime will have new benefits including: 

• Having at least two directors, 
• Annual director elections, 
• The availability of Tribunal applications for director removal and appointments,
• A mandatory requirement to take out public liability insurance, seen as additional security for the viability of the CA,
• Mandatory reserve funds,
• Power to apply for an order for sale where a unit holder is in arrears,
• Minority protections for changes to the Commonhold Community Statement, in certain circumstances,
• Annual budgets set by the CA must have a yearly vote, in which the members will have their input and the budget put to a majority vote of those participating, 
• Where a budget is not passed, the previous budget will rollover; and
• A key difference - that CA directors are required to facilitate collective decision making and seek the views of all involved in the building, opposed to pure board decisions.

Whilst the reforms to CAs will not remove the usual issues between neighbours, costs and the need for building repair and maintenance, they do go to limit abuse of position and make the required processes as inclusive as possible. These reforms are at the heart of Commonhold and in order for it to be a successful new standard tenure, the governance will need to be as smooth as possible.