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What is Right to Manage and How do I get it?

Apr 05, 2017

What is “Right to Manage”?

Since the 2002 Commonhold and Leasehold Reform Act, it has been a relatively simple process to take control of the management of your block of flats or maisonettes.

“Right to Manage” gives Leaseholders the statutory right to take over management of their property from the landlord by setting up a “Right to Manage” company. This means that if you, as a leaseholder of a flat or maisonette, are frustrated with the way your building is being managed you have the right to take over the management responsibilities.

As a leaseholder seeking “Right to Manage”, you do not have to do any of the following:

  • Prove any mismanagement of the premises.
  • Get the landlord’s permission.
  • Obtain any court order.

And it comes as no surprise that more and more people are choosing to exercise their Right to Manage, given that it’s simply a case of following a sequence of clearly set out steps whilst abiding by some well-established legislative requirements.

How to get Right to Manage

There are 5 steps to getting the Right to Manage your building, as follows.

Ensure that your block qualifies

In order to qualify, you must meet the following criteria

  • Your building must be in part self-contained and contains at least 2 flats
  • No more than 25% of the building is used for non-residential use ( not including car parks and common areas)

There are some specific issues surrounding Crown Estate or housing associations, please contact us to discuss these.

Create a RTM Company

The RTM Company is the actual body that will take on the management responsibility and is a relatively low cost process that may be carried out by a company formation agent. When it comes to directors, we recommend a minimum of 3 lessees (or all of the company founding leaseholders for smaller blocks) are appointed. 

Secure participating leaseholders

At least 50% of leaseholders in a block must be willing to become members of the Right to Manage Company. Usually, this number has been confirmed before getting this far through the process as a series of informal meetings will have been held to discuss the prospect. A notice to participate must be issued to all as yet nonparticipating leaseholders who will then have 14 days to respond. The form and content of this notice is dictated by the legislation.

Serve a notice of claim

Once you have the required 50% of leaseholders willing to become members of the RTM Company, a formal notice must be submitted to the landlord informing them that the company intends to exercise the Right to Manage. It is important that this step follows the legislation requirements, the form and content of this notice are dictated by the legislation and must contain certain key pieces of information.

Once the notice is served the landlord has a month to respond. If no response is issued, the landlord is deemed to have accepted your claim.

If the landlord does contest your claim, they will be required to provide the reasons for this. If, having heard the landlord’s contention, the leaseholders wish to continue with the process they must take the landlord to the First Tier Tribunal (property). This tribunal will assess whether the leaseholders do have the Right to Manage. However, there is little basis that is acceptable, other than if the property doesn’t meet the criteria laid out in stage 1.

Prepare to take over management of your property

You would usually have a 3 month period to prepare for the handover. You should

  • Consider whether to use a managing agent and how to tender for this
  • Discuss and agree the level of service required (for cleaning, gardening services etc)
  • Issue a Section 93 information request to the Landlord to receive all information pertinent to the management of the block
  • Arrange for insurance to be in place from the date of acquisition
  • Sign up contractors required to deliver services

The landlord is obliged to hand over all uncommitted service charge funds on the RTM acquisition date or as soon as practicable afterwards.


The Responsibility of Right to Manage

Whilst achieving “Right to Manage” is an accomplishment which will reward you as leaseholders the ability and independence to make your own decisions about the upkeep and management of the flats, it should be noted that assuming “Right to Manage” is a big responsibility that must not be taken lightly. A RTM Company will need to know company procedures (or employ an advisor), RTM officers will have the responsibility of the landlord as well as the normal responsibilities of company directors, and a RTM Company will be as vulnerable to criticism as the landlord was.The RTM company, and therefore the directors of the RTM company, are responsible for the following:

  • undertaking the landlord’s obligations in the block’s leases as if they were the landlord
  • maintaining the building so it does not deteriorate
  • operating the RTM company in line with company law
  • ensuring the block is maintained / serviced in line with the lease
  • ensuring the block is maintained / serviced in line with current Health and Safety regulations

Failure to satisfy these obligations can have legal and / or financial ramifications for the Right to Manage Company and its directors.

However, the RTM Company does not have to carry out the management itself. Instead, you can appoint a Managing Agent to carry out the management of the building. This will bring an organised approach to the duties of the RTM company, such as collection of service charge and management of reserve funds, the creation of redecorating timetables and repairs, inspections and supervision of paid work.

Jennings and Barrett: Your specialist Block and Estate Managing Agent Local, Professional, Independent .

Jennings and Barrett is proud to be one of the longest established Block and Estate Managers in South East London and Kent and can assist with Right to Manage into Essex too. Established in 1910, we have a proven reputation for reality and consistency in the field of block and estate management, and can advise, assist and support you through the RTM process. Contact us on 0203 598 9665 or email Richard Bould at richard@jenningsandbarrett.co.uk to find out more.

(information obtained by lease-advice.org)

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