The Right To Manage

We don’t have a Management Company and we think we need The Right To Manage

If you are one of the many developments that do not have a Management Company, there are other solutions to assist you in changing your agents. These can range from the Right To Manage (RTM), a landlord instruction or a request to appoint a manager via the First Tier Property Tribunal (formerly the FIRST-TIER TRIBUNAL (PROPERTY CHAMBER)) amongst a few.

Since its introduction under the Commonhold and Leasehold Reform 2002, it’s becoming increasingly popular for leaseholders to take control of their block and the management functions by acquiring the right to manage their building.

Right to manage is a non-fault based procedure. However, the leaseholders need to meet certain qualifying criteria, and follow the correct processes. If the criteria are not met, for example if the building does not qualify or there are insufficient numbers of leaseholders who participate, then right to manage cannot be undertaken.

However, if leaseholders are able to meet the qualifying criteria, then they have a legal right to exercise the right to manage.

By acquiring the right to manage, the RTM Company takes over the landlord’s (and/or Management Company’s) management functions under the lease. The RTM Company will therefore become responsible for the repair, maintenance and provision of services under the lease, and will also deal with the enforcement of covenants and grants of approval/consent.

The Landlord will still retain certain limited functions. The right to manage isn’t, therefore, complete control. An RTM Company would be able to appoint their choice of Managing Agent.

Complete Property Management are specialists in the Right to Manage (RTM) process and
Block Management.

Complete Property Management are highly experienced in the Right to Manage (RTM) process. As a Block Management company, we have an excellent track record for resolving issues inherited from past agents and landlords. One way to ensure this is possible is by using the RTM process (as defined by the 2002 Commonhold and Leasehold Reform Act). The RTM process allows leaseholders to join together and take responsibility and control of the management from the landlord. The responsibilities of any RTM company will normally be outlined within your lease but can include the following: setting of service charge budgets, major works and Section 20 consultation, housekeeping standards, and most importantly for many of our clients, the administration of buildings insurance. From our experience clients have benefitted from large savings on areas such as buildings insurance cover. Savings of over 50% on insurance have been achieved as well as other cost effective solutions.

Complete are experienced as apartment block and estate managers. This experience allows a professional & cost effective service to any RTM client. If you would like to discuss how we can resolve the issues and save you money, please complete the contact us form and we will call you at your convenience any time of the day.

Right To Manage (RTM)

The Commonhold and Leasehold reform Act 2002 allows leasehold tenants to remove the company which manages their block and replace it with a better management company. This process can be difficult to complete without the help of a professional company to guide you through the process.

Why take your Right to Manage?

If you live in a block of flats and do not have a say in who runs that block then you can benefit from the Right to Manage Process. The right is available to all flat-owners, in all blocks, where they fulfil the following criteria:

  • At least 50% of the flat-owners within the physical block of flats must want to go through the process.
  • At least 66% of the flat-owners within the physical block must have long leases (greater than 21 years at the time of issue).
  • No more than 25% of the block may be used for non-residential use (excludes car parks and common areas connected with the flats).

 

If your block fulfils these criteria then it is highly likely you will be able to go through the Right To Manage process with 100% success. There are a small number of technical legalities which can prevent some blocks going through the right to manage process and so you should discuss this with us beforehand so we can advise whether to progress your claim as one right to manage claim or several for your complex.

If you find you are ineligible for the Right To Manage legislation, but are having problems with your managing agent, please contact the Lease Advisory Service who can provide valuable help and guidance on all matters relating to leasehold property.

Appointment of Manager

Where management of the block has gone wrong, an application can be made to the First Tier Tribunal (formerly the First-Tier Tribuna Property Chamber) for the appointment of a manager who will take over management of the block.

This is a fault based procedure, and there must therefore have been specific default on the part of the existing manager. This differs from the right to manage, which is a non-fault based procedure.

The grounds on which a Tribunal may appoint a manager are set out in the Landlord and Tenant Act 1987. If one or more of those grounds are made out, and the Tribunal considers it just and convenient, they are empowered to appoint a manager on such terms as they think fit.

Generally, the process starts with the service of a Preliminary Notice (often called a Section 22 Notice). This sets out the grounds on which the Tribunal would be asked to make the order. Where matters are capable of remedy, it should also specify the steps that should be taken to remedy those matters.

The grounds for making an Order are that:

  1. a relevant person is in breach of a management obligation owed to the leaseholder under the lease, and it’s just and convenient to make the Order; or
  2. unreasonable service charges have been demanded or are proposed or likely to be demanded, and it’s just and convenient to make the Order; or
  3. unreasonable variable administration charges have been demanded or are proposed or likely to be demanded, and it’s just and convenient to make the Order; or
  4. a relevant person has failed to comply with the provisions of a prescribed code of practice (e.g. RICS Code), and it’s just and convenient to make the Order; or
  5. such other circumstances make it just and convenient to make the Order.

A single Lessee can apply to the Tribunal for a Management Order. However, the Tribunal may be more persuaded that it’s just and convenient to make the Order if there are greater levels of support amongst the leaseholders.

The Manager is a servant of the Tribunal and acts in accordance with the terms of the Order made by the Tribunal.

Collective Enfranchisement

Subject to meeting certain qualifying criteria, leaseholders can buy the freehold of their block for a fair market price.

The Leasehold Reform Housing and Urban Development Act 1993 (as amended by the Commonhold and Leasehold Reform Act 2002) gives leaseholders the right to compel the sale of the freehold of the building or part of the building.

Both the building itself and the leaseholders must meet certain qualifying criteria before any claim can be pursued.

There is a set process to be followed, and strict timetables that have to be adhered to. By acquiring the freehold, leaseholders take over the way their building is managed.

With so many options available, and complexities involved in each, the best advice is to speak to a legal professional with proven experience. We have specialists available to help.

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Complete Property Management have been the management agents for the Tobacco Factory in the centre of Manchester since 2006. At the time they took over, there were many problems with the state of the building, the quality of service residents received, and a large amount of service charge arrears...

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