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What is a Right to Manage Company and is it right for me?

A lot of the frustrations we hear about from tenants usually centres around the management of the building and issues with a lack of management or poor management, works not being undertaking in good time and the building not being looked after as well as it could perhaps be. 

Perhaps you, together with your neighbours, would like to have more of a say in how your building is managed?  Are there things you would like done differently around the building? 

Well, there may be an answer for you.  Under the Commonhold and Leasehold Reform Act 2002 (“the 2002 Act”) long leaseholders have a collective right to take over the management of their block where:- 

  • there are at least two flats in the building on long leases (granted for 21 years or more); and,
  • not more than 25% of the building is non-residential

As this is a collective right rather than an individual right, the flat owners of at least half of the flats in the building must join in.

This right is a ‘no fault’ right, meaning that the current manager or landlord doesn’t need to have done anything wrong in order for the leaseholders to begin the process. 

This process is usually preferred by leaseholders who may not be able to afford to collectively enfranchise their block but who do want more control and a say in the management of the building. 

Although it is a no fault right, there is still a process to be followed and a claim must be brought in the correct manner.  Briefly, the process includes:

  1. forming and incorporating a right to manage company (“the RTM Company”);
  2. serving a Notice of Invitation to Participate on the leaseholders;
  3. serving a Claim Notice on the landlord, management company and any third parties to the lease; and,
  4. Acquiring the right to manage (assuming a Counter Notice denying to the right is not served). 

A landlord does have an opportunity to respond to the claim by serving a Counter Notice which will either admit or deny the claim.  If the landlord denies the claim, the RTM Company will need to make an application to the First-tier Tribunal (“the FTT”) for a determination. 

All being well, on the acquisition date, whether that be by the date given in the Claim Notice or by the date determined by the FTT, the management functions under the leases will be transferred to the RTM Company. 

If you would like to see if the Right to Manage may be right for you, please contact me on:-

Tel:         01295 661458

Mobile: 07805 823764

Email:    danigreen@brethertons.co.uk

Dani Green is a Senior Associate at Brethertons within the Residential Leasehold Team. Dani has worked within the leasehold property sector since 2011 and qualified as a Solicitor in 2016.