Please Note: This Article is 10 years old. This increases the likelihood that some or all of it's content is now outdated.

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.

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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

About LEASE:
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

Please Note: This Article is 10 years old. This increases the likelihood that some or all of it's content is now outdated.

1 COMMENT

  1. Often freeholders may have a vested interest in retaining the status quo, and are therefore reluctant to see any changes in management. In cases like these, the freeholder can try to disqualify an RTM claim for your building. The freeholder may send a RTM Claim to their solicitors to look for a reason to reject the claim.

    So it is vital not to overlook any part of the Claim process, no matter how insignificant. The procedure is reasonably well laid out, but there are still many ways a Claim can be rejected. In a disputed case, decisions may be made after application to a Leasehold Valuation Tribunal (LVT).

    Recent reasons for rejection have include:
    • Claim Notice not given to a landlord of the whole or part of the premises (LVT rejection of Claim 26th January 2009)
    • Less than 2/3 of the flats are held by qualifying tenants (LVT rejection of Claim 17th April 2009)
    • Less than 50% of owners being proven members of the RTM company (LVT rejection of Claim 8th September 2008)
    • No documentation to prove the members are qualifying tenants (LVT rejection of Claim 6th May 2008)
    • Incorrect RTM company formation – not limited by guarantee, incorrect Memorandum of Association, no incorporation certificate (LVT rejection of Claim 1st May 2009 – second attempt)

    These examples are not too difficult to avoid, they just require close attention to the Act.

    http://www.leaseholddoctors.co.uk/right-to-manage.html

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