Commonhold and airspace development

There is pressure in the UK for constructing new flats on top of existing buildings, and the planning laws have been liberalised at least twice in the last five years to facilitate this:

The effect of this kind of thing is that the potential value of the building increases. If the owners of the existing flats in a building want to buy it, they might now have to pay the owner of the building for the value of the flats that could be built on top in the future. Needless to say, the Leasehold Knowledge Partnership is hopping mad about this, as are some MPs:

So for my own block, the freehold was offered to the owners of the flats for under £100K some years ago; there's space for £2000K of flats in the empty airspace above the building. We'd never be able to afford to buy the building if we had to compensate the freeholder for the loss of potential value.

But of course, preventing the construction of flats above one's own is sometimes the whole reason for wanting to buy the overall building in the first place: the owners of the flats buy the freehold on behalf a company they jointly own. There are two ways of doing this:

• the flawed, but nearly universal "Share of Freehold" company or "RMC", wherein this company becomes the new landlord of the existing leaseholder of the flats, with the same leases as before, OR
• the generally superior but largely untested "commonhold association", where the original terms and conditions are replaced by standardised rules

The problem here is: it's harder to guarantee that an individual flat owner will be able to block airspace development, under commonhold. With a share-of-freehold arrangement, the flat owner can agree a new lease preventing airspace development as a condition for the overall freehold acquisition. This can't be removed by a supermajority vote.

Commonhold, on the other hand, has two levels of private rule-making: the articles of association of the company, and the commmonhold community statement (a "CCS"). There is an explicit ban on using CCSes to restrict the creation of interests in the common parts, which would make it difficult to prevent a majority in the association from building on the roof and then renting out the resulting space:

You could put something in the company articles, but they can be changed by a supermajority. Some commonhold associations could be set up with the airspace development ban entrenched in the articles, but it's expected that these entities will be set up by property developers, so there's little chance of that.

This removal of the protected terms of the individual relationship between a flat owner and the entity that owns the building is one more argument for commonhold to be introduced on a voluntary, non-coercive basis.