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Right to Manage

The Right to Manage (RTM) was introduced in 2002 via the Commonhold and Leasehold Reform Act.

RTM gives leaseholders the right to take over the management of their property.

To do this they need to set up a Right to Manage company.

This section of our website looks at RTM companies, and the procedure by which leaseholders can exercise their rights.

What is a Right to Manage Company?

A Right to Manage Company (RTM Company) is a private company limited by guarantee with a prescribed constitution to manage premises.

Qualification Criteria

Provided that tenants meet the qualifying criteria and the correct procedure is followed, your landlord has very limited scope to object or to hold up the process.

The Commonhold and Leasehold Reform Act 2002 (“the Act”) sets out the conditions that must be met for a building or lease to fall within the scope of RTM.

Qualifying Buildings: Premises that consist of:

  • a self-contained building, with or without appurtenant property;
  • containing two or more flats held by qualifying tenants;
  • where the total number of flats held by such tenants is not less than two-thirds of the total number of flats contained in the premises.

The Act also sets out which tenants of flats are entitled to establish and join the RTM Company, known as qualifying tenants.

Qualifying Tenants

  • A person who is a Tenant of a flat under a long lease (a lease of more than 21 years)
  • A flat is defined as a separate set of premises which:
    • forms part of a building;
    • is constructed or adapted for use for the purposes of a dwelling; and
    • either the whole or a material part of it lies above or below some other part of the building

The Law Commission published its report on 21 July 2020 on leasehold reform. It included changes to the Right to Mange process, making it cheaper and simpler, available to more leaseholders in a wider variety of buildings.   

How long does the right to manage process take?

It should only take between 6 to 8 months but can take longer. It all depends on how cooperative the participating tenants, the incumbent managing agent and/or your landlord are. Our specialist team are here to help you through the process.

What is the Right to Manage procedure?

The RTM Company

Participating Tenants must form an RTM Company. It must be a private company limited by guarantee and have the correct Memorandum and Articles of Association.

Notice Inviting Participation

  • The RTM Company must give notice to each qualifying tenant who is not already a member of the company.  See here for qualification details.
  • The Notice Inviting Participation must state:
    • that the  RTM Company intends to acquire the Right to Manage the premises;
    • the names of the members of the RTM Company;
    • Invite the recipients of the Notice to become members of the RTM Company and; 
    • Contain such other information as may be prescribed by the Secretary of State.
  • The Notice must be accompanied by a copy of the Articles of Association of the RTM Company or include a statement specifying a place in England or Wales, where they may be inspected, the time at which they may be inspected, a place where they can be ordered and a reasonable fee for a copy.
  • All qualifying tenants must be added to the RTM Company membership register.

Notice of Claim

  • Two weeks (14 days) after giving valid Notice to Participate, the RTM Company may claim the Right to Manage.
  • Notice of Claim must be given to the following:
    • Any landlord under the lease of any whole or part of the premises;
    • Any other party to the lease who is neither a landlord nor a tenant; any manager appointed under Part 2 of the Landlord and Tenant Act 1987;
    • All qualifying tenants; and
    • If a manager has been appointed under Part 2 of the Landlord and Tenant Act 1987, to the court or tribunal which appointed the manager.

The Notice of Claim must be in writing and must:

  • specify the premises and contain a statement of the grounds on which it is claimed that they are premises to which the right applies;
  • state the full name of each person who is a qualifying tenant of a flat contained in the premises; and a member of the RTM Company, and the flat address
  • contain particulars of the lease of each person such that it is sufficient to identify it, including:
    • the date the lease was entered;
    • the term for which the lease was granted; and
    • the date of commencement of the term
  • state the registered office of the RTM Company;
  • specify a date to respond which must not be earlier than 1 month after the service of the notice
  • specify a date, at least three months after, on which the RTM company intends to acquire the Right to Manage the premises

Counter - Notice

  • A counter – notice must be served no later than the date specified in the Claim Notice by any person given a Claim Notice.
  • The counter – notice must admit or deny the right to manage claim. 
    • If a counter-notice disputes the RTM Company to acquire the management of the premises, an application can be made to the by the RTM Company to the First Tier Tribunal (FTT) for a determination. The application must be made no later than two months after the counter notice was given.
    • The right to manage cannot be exercised until the dispute is determined in favour of the RTM Company or unless the counter notice objections are withdrawn.   
    • If there is no dispute as to the Notice of Claim, the RTM Company acquires the right to manage on the date specified in the notice.
    • The RTM Company is liable for the costs of the landlord in respect of the claim once a Claim Notice is served. 

The Law Commission published its report on 21 July 2020 on leasehold reform. It included changes to the Right to Mange process, making it cheaper and simpler, available to more leaseholders in a wider variety of buildings.   

If you would like to discuss any of the above or your individual rights as a leaseholder, please contact Bukola Obadun-Craigs bukolaobadun-craigs@roythornes.co.uk

 

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