What is the “Right to Manage”?
“Right to Manage” was introduced in 2002 to empower leaseholders and allow them to take back control from bad landlords or building management, but it can be actioned for any reason. Any leaseholder who wishes to do so may set up a Right to Manage (RTM) Company and transfer the landlord’s management functions to the company. Multiple leaseholders can be a part of this company and even the landlord has the option of joining too if they wish.
How does the process start?
Setting up a Right to Manage Company (RTM) isn’t too dissimilar to setting up a regular private company, notifying Companies House and establishing directors. Once management has been transferred to the company, any appointed directors will have a legal responsibility for managing the property.
A formal notice has to be served to the landlord but by no means does the landlord have to give their consent, nor does any mismanagement need to be proven.
The claim may only be exercised if the building and RTM Company meet the set requirements, and at least half of the qualifying leaseholders hold membership in the company.
What Happens Next?
The RTM company has a few options for how to go about managing the building. Many RTM companies keep many of the day-to-day management processes the same, even instructing the same management agent as their ex-landlord. They may choose to do this if they are content with the quality of management but wish they had more of a say in the big decisions that affect their property.
The other options include choosing to self-manage the building, which comes with plenty of extra responsibilities and requires particular skills and training, or choosing a new agency to manage the building. Both options can have the added benefit of reducing operational costs as well as maintenance or repair costs. There is an extent to this, of course, the RTM is still under government regulation, and directors can face serious consequences if it is found that the RTM company is saving money by neglecting essential services or allowing the building to deteriorate.
Contact us:
If you would like to find out if you qualify for RTM or if you would like advice on setting up or managing an RTM Company, our property litigation solicitors are on hand to give individualized, expert advice that can help you take or keep control over your home. Give us a call at 0330 111 31311 or fill in our contact form and one of our colleagues will be in touch at the earliest opportunity.