Long leaseholders of residential flats have the right to compel the transfer of management responsibilities from landlords and management companies to their own, specially created, company.
It may be that you as a leaseholder are dissatisfied with the way that your building is being managed. Repairs may take longer than expected, the development may be falling into a state of disrepair or your landlord may never be available. You may however, be perfectly satisfied with the services that are being provided but simply want to take responsibility for your block of flats. In any of these cases, you may wish to explore the possibility of acquiring the right to manage.
Long leasehold dispute resolution specialist Eleanor Cornthwaite explores what the right to manage is and how to obtain it.
What is the right to manage?
The right to manage (RTM), which was introduced through the Commonhold and Leasehold Reform Act 2002, provides long leaseholders – those with leases granted for a term of 21 years of more – with the opportunity to control how their property is managed. It is often an attractive prospect for tenants in long-term lease agreements.
Leaseholders don’t need to prove any mismanagement by the landlord, obtain any court orders or even get the landlord’s permission.
Who can apply for the right to manage?
To be able to qualify to apply for the RTM, the building that you live in must adhere to the following:
- It must be self-contained or part self-contained and include at least two flats;
- At least two thirds of the flats must be let to tenants with leases granted for terms of 21 years or more;
- While the building can be part commercial, the non-residential proportion must not be any more than 25 per cent of the total floor area;
- It must not fall within the residential landlord exemption which applies to blocks of four or fewer flats where the landlord resides in one of them.
In order to acquire the right to manage leaseholders of at least half of the flats within the building must be members of the RTM company so it is important that you canvass opinion at the outset to ensure that enough of the tenants are on board.
Forming the right to manage company
The RTM is acquired by the RTM company and not the individual leaseholders so you, along with other tenants, need to form a company.
Setting up the company can be a complicated process. The company needs to meet certain statutory requirements failing which it will not be recognised as a RTM company and will not be able to acquire the right to manage. It is therefore imperative that you seek specialist legal advice at this stage.
Notices must be sent to all long leaseholders inviting them to become members of the RTM company. Once the company has the requisite number of members it can then serve a notice of claim on the landlord and any other party to the lease.
While the landlord has the right to either admit that the company is entitled to acquire the RTM or serve a counter notice disputing entitlement, the landlord can only dispute entitlement if the building does not qualify, the RTM company is not statutory compliant or there are insufficient members.
The date on which the right to manage will be acquired depends on whether the landlord agrees to the claim, fails to respond or disputes the claim.
In cases where the claim is disputed an application may need to be made to the First Tier Tribunal so it is likely that you will need specialist legal advice to help you along the way.
For more information on applying for the right to manage or any other long leasehold dispute matter please call Eleanor Cornthwaite on 0161 761 4611 or email firstname.lastname@example.org