Right To Manage – All You Need To Know!
9th Jun 2021
What is Right To Manage?
Right to Manage (RTM) is a popular option for leaseholders who want more control over how their block is managed, and is generally used by leaseholders who are unhappy with their current management.
The RTM lets you and other Leaseholders take over certain management responsibilities from the Landlord without having to prove mismanagement or undertake a lengthy litigious battle! You don’t need your Landlord’s permission, and you don’t even need a reason. However, it is important to first understand the responsibilities and liabilities of taking over the management of the building.
Under the provisions of the Commonhold and Leasehold Reform Act 2002, a Right To Manage company essentially hands back the management of the development to the Leaseholders to enable them to make the day to day decisions on Managing Agents, maintenance, insurance, repairs and the general management of the block.
RTM does not necessarily mean self-management. The RTM company can decide to carry out day to day management itself, or it could delegate this function to a managing agent. For most buildings, its best to get a professional managing agent involved, as they have the expertise and understanding of processes to be able to effectively manage the building. The managing agents will be instructed by the RTM company, so decisions on such things as major works could still be taken by the RTM company, if they wish.
Right To Manage Qualification
The next step of the process is to determine whether your building qualifies for Right To Manage. The building must meet certain conditions and a minimum number of leaseholders are required to take part.
- To be eligible for the RTM process, two or more flats must be held by qualifying tenants (a leaseholder whose lease was originally granted for a term of more than 21 years). The required minimum number of qualifying tenants must be equal to at least half the total number of flats in the building.
- The building can be part-commercial, but the non-residential part must not exceed 25% of the total floor area, excluding common parts.
- The building must be self-contained and structurally separate from other developments, including underground areas such as the car park.
- The property or block must have at least two flats.
- At least 50% of the leaseholders in the property / block must agree to proceed.
- It will not be possible to exercise RTM if the landlord is a housing authority (such as most local authorities) nor where the resident landlord exemption applies.
Right to Manage relates to an individual building, so in the case of an estate, where there are multiple residential blocks, each would require its own RTM company should you choose to go down that route.
To set up a Right To Manage company you have to follow very strict guidelines which must be adhered to. Certain Notices must be filed which must comply with the provisions of the Commonhold and Leasehold Reform Act 2002 and by extension The Right to Manage (prescribed particulars and forms) (England) Regulations 2010. The process can be quite tedious and time consuming.
Blocsphere aim to make the RTM process as smooth as possible by preparing all the relevant notices, collecting votes, obtaining official copy entries, ascertaining commercial element space, serving notice and sending requisite correspondence to leaseholders. Our in-house Right To Manage specialist has an excellent track record including freeholder defended matters. If your building and Leaseholders qualify – We will get it for you!
If you would like to see if your building qualifies for the Right To Manage process, get in contact with us.