One of the easiest ways for flat owners (lessees) to take control of their own building is to exercise the Right To Manage (RTM). The Commonhold and Leasehold Reform Act 2002 provides this right for leaseholders of flats to force the transfer of the landlord’s management functions to a special company set up by them – the right to manage company.
Press Release, www.lease-advice.org – 31 July 2009
This puts leaseholders, who generally hold the majority of value in the property, to get together and take responsibility for the management of their block without incurring the expense of buying the freehold.
The process is relatively simple. The landlord’s consent is not required, nor is any order of court needed. There is no need for the leaseholders to prove mismanagement by the landlord. The right is available, whether the landlord’s management has been good, bad or indifferent.
The right is exercised by the service of a formal notice on the landlord. After a set period of time, the management transfers to the right to manage company (the RTM company) which has been set up by the leaseholders.
Tony Essien of LEASE, the government-funded Leasehold Advisory Service that provides free initial legal advice to lessees and landlords says: “Clearly, it makes sense for the leaseholders to take over management of their most valuable assets – the flats – but to do so will bring with it duties and liabilities and RTM should be approached responsibly.
“In acquiring the power to make approvals and to enforce of the management covenants of the leases, the leaseholders , through membership of the RTM company , become wholly responsible for all decision-making in terms of budgets and reserve funds, standards of management and provision of services, repairs and major works, and with the overall function of the building.”
To qualify for RTM, the building must be self-contained with at least two flats and at least two-thirds of the flats in the building must be owned by a leaseholder whose lease was originally granted for an original term of more than 21 years and in addition at least half the total number of flat sin the building must participate as members of the RTM company.
More detailed guidance on exercising the Right to Manage can be found on the LEASE website at www.lease-advice.org.
Find LEASE (The Leasehold Advisory Service) at www.lease-advice.org or call them on 020 7354 5380
The Leasehold Advisory Service (LEASE) is an Executive Non Departmental Public Body (ENDPB) funded by Government to provide free legal advice to leaseholders, landlords, professional advisers, managers and others on the law affecting residential leasehold and commonhold. It also provides a mediation service.
LEASE is funded by –
Communities and Local Government (CLG)
Her Majesty’s Court Service (HMCS)
Welsh Assembly Government (WAG)
LEASE provides advice by telephone, by letter or email, or in person at the office by appointment; and it can arrange seminars and group meetings where large numbers of leaseholders want to discuss a joint issue.
LEASE publishes a wide range of free advice notes, that are available on request or to download.
Leasehold advisers are available for telephone advice from 9:30am to 5.00pm Monday to Friday 0n 020 7374 5380