Is Right to Manage about to get a much-needed facelift?
Clear Building Management welcome the Law Commission’s recommendations to improve the Right to Manage process and explain what’s on the cards for leaseholders.
At Clear, we’ve had the pleasure of helping hundreds of leaseholders at developments large and small to secure the Right to Manage (RTM), giving them more influence over the management of their block, saving them money, improving service levels and putting them back in control of their investments.
But RTM isn’t available to all leaseholders and the claim process is procedural and complicated. RTM can also be expensive with unpredictable costs due to leaseholders having to cover the landlord’s expenses. All of which means that RTM has most certainly not been a panacea for all ills, and we have written regularly on the pitfalls and challenges.
On 21 July 2020, the Law Commission published a series of reports to help eradicate unfair practices in leasehold. One of these reports focused on Right to Manage (RTM) and makes a series of recommendations about how the RTM process can be made more leaseholder friendly.
Here we explain what the Law Commission is proposing for RTM, and our thoughts on each recommendation:
- Ditching the requirement for leaseholders to cover the landlord’s costs in the RTM claim. This would reduce the expense of the claim and give leaseholders greater cost certainty.
- Increasing the commercial space threshold from 25 percent to 50 percent. This will make RTM available to a much larger number of developments and enable more leaseholders to take control of how their development is managed.
- Allowing leaseholders to acquire the RTM for multiple buildings on an estate. This will be a particularly helpful change for leaseholders on estates that have a number of smaller, individual blocks.
- Streamlining and reducing the number of official Notices that leaseholders have to serve during the RTM process and giving the Tribunal the power to waive leaseholders’ procedural mistakes. At Clear we have long felt that the RTM claim process is highly procedural and weighted against the leaseholder applicants, with small errors being incredibly costly.
- Improving the information available to RTM companies and their directors to enable them to make more informed decisions and to prepare for a smoother handover of the management functions. RTM is not something to be entered into lightly, and directors need to understand their duties under both company law and leasehold law. Better information, earlier in the process will also be helpful to the incoming managing agent and ensure the block doesn’t suffer while the new agent gets up to speed.
As a leaseholder-focused managing agent we welcome these recommendations with open arms and hope that the Government will act swiftly to bring them into legislation.
