24/06/2021
Right to Manage (RTM) – four key things you need to know
The right to manage process can at first appear legalistic and intimidating, but it’s not as scary as it sounds. It provides a key route for disaffected leaseholders to switch from a poor performing managing agent, get a better service and normally also save money!
Here are four key things you need to know.
1. Eligibility
The Commonhold and Leasehold Reform Act 2002 provides a right for leaseholders to acquire the landlord’s management functions by transfer to a company set up by them – the Right To Manage (RTM) company. The right was introduced, not just as a means of taking control from bad landlords, or managing agents, but also to empower leaseholders, who generally hold the majority of value in the property, to take responsibility for the management of their block.
The right to manage is available to leaseholders of flats, not of houses.
2. How?
The process is relatively simple. The landlord’s consent is not required, nor is any order of court. There is no need for the leaseholders to prove mismanagement by the landlord. The right is available, whether the landlord’s management has been good, bad or indifferent.
The right is exercised by the service of a formal notice on the landlord. After a set period of time, the management transfers to the right to manage company (the RTM company) which has been set up by the leaseholders.
3. Qualifying conditions
To set up a Right to Manage Company certain conditions must be met:
• 50% of flat-owners must want to go through the process.
• 2/3 must have long leases at time of issue
• Less than 25% of floor area of building must be commercial
Assuming there is no valid dispute, management handover will then take place on a date specified in the Notice of Claim, usually 4 months after service of it. Most RTM companies appoint their own managing agent during this period. The old and new managers should get in contact well before the handover date so that practical matters can be attended to.
Once the right to manage has been acquired, the landlord is also entitled to membership of the company.
4. What changes once the RTM company takes over?
Once the RTM company has taken over the management it can:
● Appoint its own managing agent
● Make decisions about the upkeep of the building and be responsible for its own budget
● Manage the property in the interests of its members
How we can help?
• Support. We have experience of the Right To Manage process and so can assist you through the process to ensure a smooth handover.
• Partnership. As managing agent we are there to do all of the heavy lifting, but the development is your home at the end of the day, and so the RTM Directors on behalf of the rest of the leaseholders should be able to influence how it is run. We always aim to deliver a high quality service and to support RTM Directors wherever possible.
• Fairness. We deliver competitive pricing with no hidden fees or commissions added to inflate your bills.
Contact us today for a no obligation conversation about the opportunities and pitfalls that might lie ahead.
