Since 30th September 2003 when the relevant sections of the Commonhold and Leasehold Reform Act 2002 came in to force leaseholders have obtained the option to take over the management of their property – Right to Manage (RTM).
Right to Manage allows leaseholders as a group to decide on the management arrangements for their property.
Since 2003 the take up has been pretty slow.
Leaseholders taking the RTM option are those that want to acquire the management of their block.
If you choose the RTM route you must apply using the prescribed forms The Right to Manage (Prescribed Particulars and Forms) (England) Regulations 2003 – Statutory Instrument 2003 No. 1988 which are available at here.
For the Right to Manage to apply:
- The property must be a self contained building or part of a building
- It must consist of flats – not flats and houses
- Two or more flats must be held by long leaseholders
- Two thirds of the total number of flats must be held by long leaseholders
RTM does not apply in a converted block of four or fewer units or where the internal area of the non residential parts exceeds 25% of the total.
Where the block is on an estate with numerous blocks RTM can be exercised individually for each block.
Once the RTM Company has been set up all leaseholders will be served with a notice in a prescribed form which requests the leaseholders to join the company if they want to. Not all Company members have to join the Company but all do have the right to. Company members must include at least half of the flats.
14 days later the claim can proceed and the RTM Company can serve a claim on the landlord who has a month to serve a counter notice. The claim needs to specify when it intends to take over the management.
If the landlord denies that the RTM can exercise the Right to Manage, the claim can be taken to a First-tier Tribunal (FTT) to decide.
If the Company has received a counter notice from the landlord and does not apply to the FTT, the claim will be deemed to have been withdrawn.
From the date you have obtained your Right to Manage, existing contracts can be taken over by the RTM company or choose to change to their own suppliers if they prefer.
Any landlords options under the lease become the responsibility of the RTM Company, it cannot give approval without giving 14 days notice to the landlord, or 30 days for approvals on subletting, structural changes or change of use.
RTM Companies can sue for debts owed from non payment of service charges and some breaches of the lease, however, they do not have the right to enforce forfeiture powers and would need to obtain the landlords full co-operation.
