THE OPPORTUNITY TO CONTROL HOW YOUR PROPERTY IS MANAGED
Right to Manage gives leaseholders the opportunity to take over the management of their property – but with very real responsibilities.
What is Right to Manage?
The Right to Manage (RTM) was introduced through the Commonhold and Leasehold Reform Act 2002. It gives leaseholders the statutory right to take over the management of their property from the landlord by setting up a special company – a right to manage company.
RTM is an important right for leaseholders. They do not have to get the landlord’s permission, prove any mismanagement or obtain any court order to exercise the right. But it does come with some very real responsibilities and it’s not a decision that should be taken lightly.
Qualification for RTM
The building must meet certain conditions and a minimum number of leaseholders is required to take part.
1. At least two-thirds of the flats must be let to ‘qualifying tenants’*
2. It can be part-commercial but the non-residential part must not exceed 25% of the total floor area.
3. RTM does not apply where the immediate landlord of any qualifying tenant is a local housing authority.
4. RTM does not apply where the premises fall within the Resident Landlord Exemption. To fulfil this exemption would require the following:
The premises must be other than a purpose-built block; AND
They must comprise not more than four flats; AND
One of the flats must be occupied by the freeholder or an adult member of their family as their only or principal home for the last twelve months.
5. The right to manage may only be exercised by a right to manage company and the members of the RTM company must comprise a sufficient number of qualifying tenants. The required minimum number of qualifying tenants must be equal to at least half the total number of flats in the building.
*A ‘qualifying tenant’ is a leaseholder whose lease was originally granted for an original term of more than 21 years. There is no requirement for any past or present residence in the flats, nor any limit on the number of flats which can be owned by one person.
The right relates to a building, so, in an estate of separate blocks, each block would need to qualify separately and an individual RTM notice served. In the case of an estate of flats under the same management, it would be sensible to take over the management of the whole estate, but this would have to be accomplished by application in respect of each separate block.
RTM FEES FOR NON-RETIREMENT BLOCKS
Our standard fee for RTM is a base charge of £1000 plus vat, plus £50 plus vat multiplied by the number of flats in the applicant block.
If there are multiple blocks applying it is now a legal requirement to form one RTM Company for each block even if the intention is for the blocks to be under a single management company. The overall fee for multiple RTM’s in a single estate is a base fee of £1,000 or £200 per block (whichever is greater) plus £50 multiplied by the total number of flats.
If the Claim is disputed and it is necessary to make applications to the First-tier Tribunal or the Court, the cost of professional representation is subject to an additional charge, usually about £1,500 to £2000.00. This may increase by agreement in complex cases.
We work promptly and efficiently to secure your Right to Manage:
1. Members instruct Oakfield and pay our fee.
2. Oakfield will create your new Right to Manage company for the block, and register it with Companies House. Our accountants will ensure that your company is properly constituted in accordance with the RTM regulations and the Companies Act.
3. Oakfield will make land Registry searches.
4. We will ask two leaseholders to become directors of the new RTM company.
5. 50% of qualifying leaseholders are needed to sign up as members of the RTM company to claim the Right to Manage. Oakfield will help you canvass the support of fellow leaseholders.
6. We will serve Notices Inviting Participation, in the form prescribed by law, on all qualifying leaseholders who are not members of the RTM company.
7. We may serve a Right to Information Notice on the landlord requesting information needed to claim the RTM, and the landlord must respond within 28 days.
Oakfield go further than simply guiding you through the process, we will carry out the Right to Manage on your behalf.