Right to Manage
Collectively take over management of your building
Right to manage is a collective right whereby flat owners can make a claim to take over management of their building. It is a no-fault based right meaning there is no need for there to be any problem with the existing management.
The Right to Manage process is set out in the Commonhold and Leasehold Reform Act 2002. Making a claim was intended to be a straight forward process, but dozens of claims have been contested over the years by landlords and managers trying to resist claims on technicalities. Masters Residential Leasehold Law can help you avoid the pitfalls and get your claim right the first time.
What do we have to pay?
No premium is payable for the right to manage but the participants have to pay
- The landlord’s reasonable legal fees for responding to your claim and for handing over management
- Your own legal fees
- Any disbursements such as Companies House fees
What buildings qualify?
The right to manage is available to buildings containing flats.
- The building must be free-standing or a self-contained part of a larger structure;
- The building must have at least two flats in it;
- Two-thirds of the flats in the building must be held by ‘qualifying tenants’. Qualifying tenants are flat owners whose leases were originally granted for 21 years or mor
Some buildings are excluded from the right to manage, including buildings where the flat owners’ landlord is a local authority and buildings where more than 25% of the floor space is in commercial use.
How many flat owners need to participate?
At least 50% of the flat owners in a building must participate in order to make a claim.
Where there are only two flats in a building then the owners of both flats must participate.
What is the process?
The first step is incorporating an RTM Company, which is a company limited by guarantee (as opposed to shares) which has the Articles prescribed for RTM Companies.
If all of the flat owners are participating in the claim then they can proceed straight to serving a claim notice otherwise non-participants must be invited to join the RTM Company.
Once there is sufficient support for the claim, the participants can serve the claim notice on all landlords at the building with copies going to all of the flat owners. The landlord or landlords must be given at least one month to respond. The claim notice must also set the date on which management will be acquired; that date must be at least three months from the date they have been given to respond with their counter notice.
If the Right to Manage claim is rejected then the participating flat owners can apply to a specialist property Tribunal for a determination of whether their claim is valid.
What does the Right to Manage mean in practice?
The RTM Company steps into the landlord’s or manager’s shoes under the terms of the leases of the flats, it does not gain additional powers. This usually entitles it to insure the building, and maintain it and to collect service charge payments from the flat owners.
Where there are restrictions in the leases the RTM Company has limited rights to authorise applications from the flat owners to alter their flats or sublet them. Final authority still rests with the landlord.
The RTM Company does not have authority to collect ground rent or to forfeit any leases.
Further information
Extensive information about the right to manage can be found on the Leasehold Advisory Service website.
We typically charge £500 (in total not per-flat) for helping you to acquire the right to manage your building provided it has six flats or less. This includes helping you to incorporate an RTM company and ultimately serving the right to manage claim notice on the landlord and any third parties. It does not include advice in connection with any dispute over service charges or the disputes over the hand over of management generally.
Our prices depend the complexity of your claim. If you email us information about your building we will be able to provide you with a detailed quote. There is no obligation to instruct us.
The factors that influence our prices are:
- The number of participants
- The size of the building
- The number of parties on whom the claim must be served
- Whether there are multiple buildings involved
- Whether the matter proceeds to a Tribunal
- Whether there is management information that needs to be handed over once the right to manage has been acquired
In addition to our fees you will incur third parties costs, such as Companies House fees, of approximately £100.
We are not currently registered for VAT and so no VAT is charged on our fees.
Sample pricing
Where the building contains two flats, the freehold is owned by the flat owners’ immediate landlord, the claim is admitted and there is minimal management information to be handed over, we would typically charge £500.
Where the building contains ten flats but only six flat owners participate, the freehold is owned by the flat owners’ immediate landlord, the claim is admitted but there is a reasonable amount of management information to be handed over, we would typically charge £800.