What you need to know about the Right to Manage process and how leaseholders can take control of the way their building is managed.
Some of the issues that impact leaseholders making the choice to take control of their own development, are high service charges, delays with repairs and terrible communication.
These and other issues are why leaseholders are increasingly making their own decisions and appointing a managing agent that best suits their needs.
It is important to know that Right to Manage (RTM) is a now statutory right and can be exercised by serving a formal notice on the freeholder and any other relevant parties.
Also, there is no need for leaseholders to prove any mismanagement by landlords or their agents, however, when leaseholders go down this route, it is usually because they are unhappy with the current situation, and want to make a change for the better.
Exercising the leaseholders’ right to manage is relatively straight forward
Neither the landlord’s consent, or an application to court are required, but, a majority of the leaseholders must be in favour of RTM.
The other qualifying criteria for RTM are:
At least tw0-thirds of the flats must be let to ‘qualifying tenants’, i.e. leaseholders whose lease was originally granted for a term of more than 21 years.
While part of the building can be commercial, the non-residential part cannot exceed 25% of the buildings total floor area, excluding common parts.
If any qualifying tenant is a tenant of a local housing authority, RTM does not apply.
RTM also, does not apply if the premises fall within the Resident Landlord Exemption. To satisfy this exemption:
- the premises must not be a purpose-built block (so, for example, it might be a converted house); and
- must not comprise of more than four flats: and
- at least one of the flats must be occupied by the landlord (or an adult member of their family) as their only or principal home for not less than the last twelve months.
Right to Manage Company and Company Directors
You need to exercise your RTM, by creating a ‘right to manage’ company, which is formed by the leaseholders. Once the RTM has been acquired by the leaseholders, it is important to know that the landlord is also entitled to membership of the RTM company. However, the landlord is only allowed one vote.
Volunteers are required to serve as officers of the RTM company. Not only do they have the usual responsibilities of company directors, but also those of residential property landlords. This is a serious task which does require action to be taken and time to be set aside for various ‘duties’.
This includes understanding and taking on changes in property law.
For example, from 23rd of January 2023, it is a legal requirement for the Responsible Person for multi-occupied buildings over 11 metres to:
- Carry out quarterly checks of all fire doors in communal areas.
- Carry out annual checks on all flat entrance doors.
- Provide information to residents about the importance of fire doors.
- The Responsible Person is ultimately the person who has legal responsibility for the fire safety in the building.
- They are usually the person who owns or is in control of a building. In a property, it could be the landlord or the managing agent.
This can seem very overwhelming, but with good advice and support it is very straightforward.
What to do next
If you are considering RTM, the first thing to do would be to ensure you have enough qualifying tenants to move forward.
Talking to a managing agent such as Fraser Allen Estate Management at the early stages of this process is advisable so we can discuss whether you satisfy the qualifying criteria and, subject to that, guide you through the procedure.
