Do You Provide RTM Services? We Want To Hear From You.
It’s clear to see that at the moment ‘Right to Manage’ (RTM) and ”Leasehold Value Tribunal’ (LVT) are hot subjects when it comes to companies associated with Solitaire / Peverel Property Management.
However, many of us aren’t too sure what to do and how to go about undertaking them.
Our ‘Essential Guide’ does offer advice on these subjects, but we feel it’s time that we gave the opportunity to some of the hundreds of solicitors who offer RTM Services / or companies that deal with the whole process, the chance to engage with a captive audience and promote their services, to visitors of TheTruthAboutSolitaire.
We know from our website statistics, that Residential Property Specialist Solicitors - are visiting TheTruthAboutSolitaire.
Therefore, for a minimal donation to TheTruthAboutSolitaire, we are giving them the opportunity to be listed on a ‘directory’ page, for you to list the specialist services that you offer (with contact details) so that we can direct visitors to you, to help those that want to go Right To Manage.
TheTruthAboutSolitaire attracts on average, over 6000 visitors a month and would be the perfect platform for any company willing to help residents with Right to Manage or tender to replace any of the Peverel Property Management companies.
We would be looking for ‘law firms’ or ‘property management companies’ that have good success rates and experience in the removal of Peverel Group / Consensus Business Group, property management companies
Interested?
E-Mail us at the following link: Directory Advertising
We are also offering companies the opportunity of a ’Premium Sponsored Link’ – which are listed at the top of every page, with a link to your website.
‘Premium Sponsored Links’ are available for rental on a weekly basis and if you are interested in this opportunity, feel free to e-mail us via the following Banner Ads Email link for pricing.
TheTruthAboutSolitaire is dedicated to ensuring that residents are offered the opportunity to be rid of the monoply that is the Peverel Group of property management companies.
January 27th, 2010 at 9:36 am
Any RTM service providers and facilitators should not underestimate the wealth of opportunity available here.
Leaseholders who have endured, for any real length of time, the ‘activities’ of the majority of property management companies under the Consensus umbrella and beyond, would be delighted to see this lot brought to their knees by deprivation of revenue – which is all that they understand.
Whilst RTM is generally a process, that if executed correctly is highly successful, understandably however may also be daunting to some. Any RTM service provider who is perhaps prepared to offer a ‘no win no fee approach’ will clean up! – food for thought perhaps?
None the less – Leaseholders should be vigilant in not creating another ‘rip off’ market and take care to ensure that they engage RTM companies with reasonable costs, which split between participating leaseholders should, be relatively modest individual cost – despite the ‘free loaders’ which perhaps are inevitable. –remember you need 51% of leaseholders to engage so essentially the RTM charge is split across participants, which being the majority will force what is a democratic process.
January 27th, 2010 at 3:34 pm
Alerting everyone interested in RTM that the Leasehold Advisory Service is holding Regional Advice Sessions around the country.
Go to their website http://www.lease-advice.org.uk and click on News. The next session is on 30th January at The Carrs Lane Church Centre, Carrs Lane, Brum, B4 7SX. Cardiff is on 20 Feb at the Parc Hotel. Free one-to-one advice with a LEASE barrister also available.
Site also states that you can request LEASE to hold a meeting in your area.
Another news item : The new rules on flat owners’ Right to Manage companies took effect from 9th November 2009. The rules around the company formation appear to have been simplified and a RTM company now requires only Articles of Association and not Articles and Memorandum of Association as previously. Full details given on the site.
I strongely advise everyone to read the LEASE pamphlet on RIGHT TO MANAGE before they make any decisions about going forward or employing anyone or any professional in the process. This pamphlet is in plain and simple English and sets out all the issues that need to be considered and adhered to in the RTM process.
January 27th, 2010 at 4:30 pm
Reply to SaxoHero: Just to clarify a few RTM points, (from the director of a rtm company and former Solitaire customer).
I doubt that any solicitor will do RTM work on a no-win no-fee basis, because invoking the right does not have to find the property management company negligent – it is simply a right.
There are some costs to the RTM company that don’t involve the solicitor: paying for the RTM company to be set up which has to be done very early in the process, and without guarantee of success. So you’d be asking a solicitor to pay the RTM co’s expenses and no solicitor is going to do that.
Also, the RTM company can be liable for the out-going property manager’s expenses for administering the process. And finally, RTM is excellent – but only company members can contribute to the cost of the process. Yes they may gain the benefit of any change, but they lose thier right to a vote and therefore a say in how the develpoment/block is managed.
There are quite strict criteria on buildings that qualify. So if you have three detached blocks of apartments, unfortunately you will need three RTM companies and you get into difficult legal territory about issues such as access roads.
We had our case scrutinised by counsel at a City of London property chambers. Although he was a direct access barrister, everything he did had to be paid on account – (in advance). As far as I’m aware counsel do not operate on a no win no fee basis. Also by paying for your legal team, you’ll have a clear understanding of what they are doing along the way.
January 27th, 2010 at 4:37 pm
Reply to Archangel: It’s best to go to a solicotr who specialises in RTM work. They will take care of settig up the company for you, although you will need one director.
RTM notice is served on the freeholder, by the RTM company via a solicitor. Some people have done it themselves (you’ll see that on here), but any error in what the Leasehold & Commonhold Act 2002, says about establishing ownership and checking leases could be used by the freeholder as an objection to your claim.
The main way RTM claims fail, is by not sticking to every aspect of the legal process. Get a solicitor to do that. You don’t want that responsibility. If you serve notice, and the freeholder replies with a counter notice – it puts the RTM company under massive pressure as it only has eight weeks to refer the matter to the Leasehold Valuation Tribunal, and when you apply to the LVT, you have to spell out the exact legal basis of your case.
A good RTM solicitor will anticipate all these potential problems.
January 27th, 2010 at 6:17 pm
Once again TTAS is providing an excellent platform for the exchange of information and increasing the visibility of the issue of negligent property management and the respective legal cures, namely RTM and LVTs.
In reply to Anon & SaxonHero: I am currently managing a RTM process and the solicitor we have instructed has offered a no win no fee, less the accrued costs such as land registry searches. However to repeat what Anon has said certain costs have to be met in advance – such as the costs of company formation. The RTM company is liable for the legal costs of the outgoing manager / landlord as this is stipulated in the Commonhold & Leasehold Reform Act 2002. Again you cant get a no win no fee on this as its an almost certain cost and not due as a result of the time of the solicitor.
The criteria that CLARA lays down for the eligibility of a premises to the RTM process is rather strict but also rather paradoxical and can be a problem for multiple building premises.
A past Tribunal (Dawlin vs Oakhill) has ruled that a single RTM company can manage a set of buildings so long as the prescribed Notice is issued for each building. Other subsequent Tribunals have used this case as a guideline and precedence but this issue is a legal minefield and good quality legal advice should be taken as each premises has its own peculiarities.
January 27th, 2010 at 6:36 pm
Thanks to Anon – my comments in regard to RTM service providers and facilitators are directed to companies outside the legal profession who offer to initiate and manage to conclusion the RTM process, irrespective of then undertaking to then provide property management services, though I am sure that they would wish to win the contract.
My further understanding is such that the RTM process does not require in any mandatory sense, the services of a solicitor to act?
Yes the action is a right and not a process of litigation and importantly the buildings in the development may have to be conjoined etc., perhaps common services etc. and in the ideal world the retention of a legal professional may be desirable – but at what cost?
My understanding from dialogue with apparently established companies who offer RTM services is that as long as the criteria are met then the RTM service provider will supply all notices etc. We are probably talking around £1,000 plus VAT for a development of 15 apartments.
Things can go wrong but in instances where the development meets the criteria, for all intents and purposes, the RTM process should succeed as I understand things, with the agreement of 51% of leaseholders?
Hence why would the no win no fee situation not apply – as per my previous comments, such would serve to introduce some healthy completion and potentially stem profiteering?
January 27th, 2010 at 7:49 pm
To SaxoHero, I suppose one could take the view that as it IS a right, there’s no need for a no-win no-fee scenario. The process can also fail for many reasons and at different stages over a long period of many months. It’s a bit like saying to a plumber if you can fix my boiler I’ll pay you. It’s just commercial drivers. NWNF litigation tends to apply where you might not make a claim for an injury or similar.
In terms of cost, I couldn’t see the point of using a company that does the whole package, because they often insist on becoming the new manager. They claim to be able in some cases, to manage the whole process for £50 per flat. But you have to read up on them as some charge £25 to write to residents about any non routine matter. Some solicitors quote on a price per block: eg £4000 for 30 flats – some quote per flat £250/£350 for example.
We discovered that if your block is not routine, there is a lack of case law as the RTM legislation (in legal terms) is quite new. So even the best intentioned solicitor can rack up a few hours work researching a point.
In terms of cost to us? Balancing charges every year since the block was built a few years ago. Management fees that have multiplied three times, and useless contracotrs… so the £500 per flat for a solcitor and barrister is already paying for itself: My first new s.chg bill – £300 CHEAPER than last year. Our buildings ins policy: HALVED.
Oh and I can phone my new property manager on his mobile. His company now works for the residents not the freeholder. RTM company membership in my block: 100%. If your neighbours really have the will to effect a change. They’ll put their hands in thier pockets.
January 27th, 2010 at 8:07 pm
Reply to Arthur Dent: So you can find a solicitor willing to take on RTM on NWNF basis? I’ve learned something there. However a barrister won’t and there was an issue that we had to resolve by using a barrister.
Also… look at what your solicitor is doing when downloading the leases, as this amounted to probably the biggest and most time consuming job. So you’ll still have to pay that whether NWNF or otherwise.
We got partially around that by photocopying our own leases and I delivered them by hand to our solicitor. The solicitor factored a profit into this job – in other words where he needed to see the Title entry – I think it costs £3 on HMLR’s web – but they were charging £25.
The biggest cost implication can be if a solicitor or barrister has to appear at an LVT – although a frivolous counter-notice should not strictly be issued it does happen, and you are then into very strict legal deadlines, and an LVT is the only way of determining your case. Then you’re looking at £3000 per day – for possibly two days plus VAT for counsel – and if s/he is not direct access, you’ll be paying your brief as well.
And while I’m playing devil’s advocate, it’s very easy to get people to agree to things they don’t have to pay for (your neighbours I mean), but that can distract them from the important role they will play post RTM. You need to know that if you’ve stood as a director, your neighbours will back you. If they’ve invested in the process they’ll be by default more involved. If they lose interest and your RTM company folds: the freeholder can appoint their choice of management company and you’re back to square one.
January 27th, 2010 at 10:01 pm
To anon……the no win no fee approach ensures diligence with a successful outcome or get paid nothing – simple – a principle that is equally applicable to the legal profession, as it is to those purporting to act on behalf of leaseholders and are directly involved in or on the periphery of the property management business. What is the difference? (Please don’t tell me that the legal profession is regulated and non legals are not!)
In the course of my enquires, I have not encountered a company that is prepared to undertake to pursue the RTM process in exchange for the ongoing property management contract – perhaps more is the pity! –on that basis then leaseholders might be able to tie in a really good deal all round – subject to ‘service level agreements’ or equivalent being satisfactory and of course, importantly, without the need to pay for professional legal services at all!
Should such be needed then the facilitating company will /should evaluate that risk at the onset.
In the majority of cases, there should be no implied necessity to retain a barrister, if the solicitor, if indeed required in any regard, knows what they are doing?
There just might be a little scare mongering going on from those with perhaps a vested interest – a few legal types maybe? I wonder?
Fair play to Arthur Dent, commenting earlier, who appears to have it sorted in this regard.
January 27th, 2010 at 11:57 pm
More on RTM and lawyers: I just know there is a lack of case law which isn’t surprising given that Commonhold and Leasehold Reform Act is so new. Many solicitors won’t represent RTM companies at a Leasehold Valuation Tribunal.
Everything I’ve written about on here is based on having been through the RTM process. In fact because we’ve replaced Solitaire where I live, why do I need to even contribute to this site?
I do it because I want to see the property management industry regulated and share my experience. I also know, having looked at many LVT decisions have gone against the RTM co simply because it failed to check the building qualifies, or there isn’t enough company members. In our case it was an issue of law, and the solicitor felt he had to seek the opinion of a barrister – two in the end and it was worth it – especially as our counsel was direct access – so I could email and even call him on his mobile when issues arose, and I’d sort of expect that for what they charge.
I’m not sure where the two other posters, who it sounds like are both going through the RTM process, are in their cases – but when (if) you receive a counter notice you have just eight weeks to deicde your next steps, and it puts you under a lot of pressure: On the last day of the eighth week, you have to lodged your case with the RPTS/LVT – otherwise you cannot try again for another two or four years – can’t remember exactly.
Of course you can represent yourself at the LVT but as I said in an earlier post my legal fees will be covered by the savings I’ll make from the first 18 months of the new service charge bill.
On the issue of new property managers, as well as small firms, there are also surveyors, and commercial property agents many with the right kind of track record for this kind of work. Any money paid to a surveyor is bonded by RICS.
And as a final cautionary tale to doing the whole RTM through a company offering a bespoke service. If you hand control of your RTM to a third party and no-one from your develpoment/block stands as a director… you could be going out of the frying pan into the fire. Who do you turn to when you want to replace your new property management company?
There are many ways of practically managing a block – I know of one in the East Midlands, where the RTM company uses a firm of solicitors to collect and chase the service charges, and a PM Co to sort all the contractors. Likewise you could use a firm of accountants as your RTM’s registered office so the director/s who often live on their developments have all the Comapanies House compliance issues dealt with at an address off site, and can even have the companies books audited because however you invoke your RTM – it comes with very many responsibilities.
January 28th, 2010 at 10:41 am
A lively exchange on the topic of RTM is healthy and I think that the previous dialogues illustrate that certain individual cases may have individual attributes and merits, that may or may not require specialist professional services.
Let us not arrive at a situation where the Consensus family of companies starts to believe that the differing opinions in these posts are therefore devisory – which is exactly what they want!
Suffice it to say that each development should thoroughly research, through an initial dialogue, which costs nothing, with all of the various agencies that can be involved with the RTM process, legal professions or non legal alike. There potentially exist a number of apparently experienced RTM service providers that are now sponsoring links such as those below – my recommendation is talk to them and when you explain who the incumbent property management company is, once they have stopped laughing, they can be very helpful and will ask pertinent questions re your individual development.
There are perhaps genuinely three levels of approach – Do it yourself (potentially hazardous), Full Legal (relatively costly and apparently with or without guarantees?) – Mid Route using property management professionals (maybe – dependent upon circumstances).
January 28th, 2010 at 12:31 pm
Re: Anon Reply to Archangel:
“The Leasehold Advisory Service” (LEASE) is an independent, leasehold advisory service financed by the government (tax payers). I am simply recommending that leaseholders starting out on the RTM hazardous trek initially EMPOWER themselves with the free information and advise that this organisation offers.
From the very lengthy and convoluted comments and exchanges of opinions that are being expressed on this post, the RTM process is clearly not a one size fits all situation.
In my own case the RTM is being carried out by the leaseholders in collaboration with an independent solicitor and locally based property management company.
January 28th, 2010 at 12:49 pm
I don’t think it’s fair to say using a solicitor is “relatively costly”. That’s a matter of opinion. We did a lot of running around ourselves that kept costs down. It was the counter-notice that made the process more expensive, but I still think £500 versus a £500 saving on the first 18 months charges is pretty good. What I failed to mention was that when the process is complete, becuase we really pushed for 100% membership and succeeded, our RTM company has about £3.5k in unspent funds which we could refund to ourselves should we wish.
By discussing a potential RTM with a solicitor first, you should get a consultation and written opinion without a fee. And you can do that as many times as you like if helps understand the process.
If you self-manage the entire process and have to bring in legal help when (if) you run into a problem, your lawyer will have none of the background information and while they play catch-up, your clock is ticking down from 8 weeks to zero.
I can’t stress enough how important this deadline is because it’s my understanding that if you don’t reply to the counter notice – to the Leasehold Valuation Tribunal inside the 8 weeks – you then have to wait four years to make another claim. I think it’s intended to make sure that frivolous claims are not made by either party.
If you self manage the process 100%. You’ll find yourself in a full time unpaid job that could last for a year. If your claim fails, then you have to explain to your neighbours why it failed.
That said, for those who may not have read all the previous comments, you do not have to prove any fault on your PM co’s part -it should be a right, as long as you check you meet the criteria (see Leashold Advisory Service guidance note), stick to all the deadlines.
But however you achieve RTM, it will gradually lessen the leverage and influence the big companies have on the industry which in itself could serve to pull the badboys into line.
January 28th, 2010 at 1:01 pm
Here’s the link to the Leasehold Advisory Service’s online guide – as Archangel says it’s free and empowering:
http://www.lease-advice.org/publications/documents/document.asp?item=21
January 28th, 2010 at 3:41 pm
Priceless TTAS Platform for discussion on RTM
In my opinion, we need solicitors who can not be enticed and their head turned. What I have gathered from our giant contributors on RTM that there are 3 options.
1. A solicitor with reasonable charges as suggested by Anon.
Could he disclose the name of the solicitor (with approval) to TTAS so others may use him? Good point one needs a solicitor if there are problems and need correct answer to win. I would think it would be good to use him. The chances are he will give best service for the opportunity of future work.
2.No win no fee as suggestion by Arthur Dent
Could he disclose the name of the solicitor (with approval) to TTAS so others may use it? He would be also useful provided he is dedicated to assist the leaseholders and has no hidden agenda. Believe me there are plenty of sharks planted to swallow you full and not even burp.
3.Do it yourself
What would be useful if TTAS have a semi retired/retired solicitor acting as in house solicitor? If someone is not confidence for fixed fee he can send the filled case with the lease for the solicitor to cast an eye. If there are any objections coming up later then for a fixed price he will be able to assist too within 8 weeks time period.
4.Before any case is filed for RTM I would ask Andy to check with him for the correct name and address so the right company name at the right address can be served if his company is the landlord. With their policy of keep changing names no one knows who is who anymore. Usually the landlord ( lesser) is the builder listed in the lease who no longer exist. I hope thier new already lists teh landlord contact deatils.
5.Could admin put in our petition to simplify the RTM procedure further to take less time to transfer the power? Right to mange should be automatic rather then a fight.
What I see would be worth in gold for admin to have in house solicitor support. Let us hope it is sooner then later
January 28th, 2010 at 4:26 pm
Re point 5 above: I should clarify one thing, and my earlier post about being an “unpaid worker for a year”. It is technically possible to clear all the RTM hurdles in a minimum of five months (I think) but this would depend on everything hitting the deadline exactly, and no counter notice. Or better still an early indication from the freeholder (ie as soon as notice is served) that there will NOT be a counter notice, wich confusingly can be cimmunicated by issuing a “positive counter notice”. I wouldn’t want to see the process shortened as the onus is on the RTM co to find out lots of information for example formally inviting leaseholders to become company members: “The Section 78 Notice” – you may not need to be a lawyer to serve this but it has to be done in accordance with the 2002 Act (CALRA). Hope that helps.
January 28th, 2010 at 4:28 pm
I do not wish to detract attention away from the serious nature of this post. However, as its purpose was to attract advertisers to the TTAS site, I wonder if anyone else has noticed that one of the “Ads by Google” in the panel at the bottom of the 12 comments to the post entitled “Goodbye Peverel OM, Hello OM Property Management” is:
“PEVEREL RETIREMENT – 27 years’ experience in retirement property management in the UK”
Oops – better not tell CARLEX!!!
January 28th, 2010 at 6:20 pm
Food for thought
Is it possible for someone to put the criteria on the site for RTM ? Let us see if time period can be reduced by supplying the right information in the first place.
If one need to have a Limited Company then one can start before going for RTM. That will save time. I would say start the Association process now by having 51% + of the leaseholders to join. It will be always useful to tackle Management Company as a group rather then one at a time. It will give an option to go for RTM if one chooses.
May be admin can help on ready made Articles of Association which favours the leaseholder needs? That will also save solicitor fees too.
It does not cost that much to register at the company house if one has ready made Article of Association.
January 28th, 2010 at 8:16 pm
Nicky,
On the 9th of November 2009 new regulations came into force “The RTM Companies (Model Articles) (England) Regulations 2009″ (SI-2009/2767) which specify the Articles all RTM companies must have. The Company Act 2006 last year changed so that companies like RTM companies are easier to set up. You can view the new regulations here http://www.opsi.gov.uk/si/si2009/uksi_20092767_en_1.
January 28th, 2010 at 9:35 pm
More on RTM Timetable/Answer to Nicky: I’ve put the link to the Leashold Advisory Service’s guide to the RTM process a few posts up from here. Perhaps Admin could hot link it to the right of this page? It spells out the exact criteria and timetable. You certainly can set up your RTM company early, and get as many residents on-board.
Here’s an example: A develpoment of 11 flats needs one director (you no longer need a company secretary). Your director will probably drive the process. You get six leases and title entries and you forward them to your lawyer or whoever. You’ve got the minimum number, and assuming you meet all the other criteria you proceed. You then form your RTM company (not sure if you can have generic mems & arts but it now seems to be simpler as outlined above). At this point the RTM company exists but has not yet taken over.
The RTM co, via its solicitor/whoever then serves a Section 78 notice on the five residents who you have not heard from. They have 14 days to become a company member. After 14 days the RTM co serves a Section 79 notice on the freeholder (not the existing management company). This is the first time they get wind of your plans. Once you’ve served Sec 79, you cannot sign up new company members until acquistion date. So it’s worth taking time to get as many residents on-side. Whoever is driving your RTM will have to knock a lot of doors and chase people. Your solictor/whoever won’t do too much chasing.
The freeholder then only has one month to respond, if it objects, it must serve a counter notice on the RTM co. Make sure you’re in touch with whoever is responsible for the registered office for the RTM co. Especially if it’s a firm of accountants where you’ll only get info 9 to 5 etc, or worse still: a resident who might have gone away for a couple of weeks.
The freeholder rather confusingly can issue a counter notice saying it accepts your claim. If they do nothing, you’re ok and can still proceed. The last date of that one month window is known as the Determination Date. If you receive a negative counter notice then you have eight weeks to respond by way of a claim to the Leashold Valuation Tribunal. You can try to persuade the freeholder to withdraw its counter notice, but you should not delay getting your application into the LVT. Unfortunately there’s no standard form for this kind of application.
That was a big factor in why we got a barrister to draft the letter (they write it in the company’s name) and also you have to copy a lot of claim notice information to the LVT (Sec 78 stuff). Acquistion can only then happen after the LVT hearing which is likely to be a minimum of 10 or more weeks.
If your freeholder does not object, (does not issue c notice) then your RTM company will take over (acquisition) three months from the determination date. On acquisition day, you can then start to sign up new company members again.
Having driven the RTM process as a company director (and resident) I would strongly advise anyone thinking of doing this to take your time and follow the process to the very letter of the law, however you do it. And believe me, you’ll need every minute of your three month window (determination date to acquisition date) to get your new managers in place. It also gives the outgoing company time to serve notices on every single contractor. The new RTM company can keep them on, but they have to be told that there will be a new company managing the develpoment/block. I hope that’s useful, and I’m sorry the posts are so long but it’s worth spelling out the pros and cons.
January 28th, 2010 at 11:28 pm
Thank you both.
I will go through all info later and see how we can put accross.
Let me get over my cold and ponder.
January 30th, 2010 at 10:35 am
A question for ANON :
When your RTM went through did you have your lease altered/varied with with reference to the Lessee’s Covenants regarding Restriction quoting Peverel OM (or whichever) has to be carried out on transfer or othe dealing?
January 31st, 2010 at 10:57 am
I promised to put a package together to highlight everything with regards RTM but time has been limited.
Even when you do use a company there are still problems encountered and things you need to inform Solitaire of as you go.
For example once notice has been served on Solitaire they have one month to appeal. After this date the RTM is granted no matter what.
It then takes a further three months before Solitare legally hand everything over.
It is at the beginning of this three month period that you need to inform your property manager that you require an account balance on your property fund and that at the end of this three month period you require all funds to be handed over together with all reciepts and bank statements…. all of them as per the law.
This three month period is Solitaires time frame to wrap everything up and if you do not tell them it will go on forever, believe me.
You also need to stop them carrying out any further work and to stop forwarding any further service charge bills or debt collection demands especially if you know you have excess funds in your account (you should ask for an account balance just before you start the process so you know where you stand)
Ok where did we start.
I first looked at several companies but decided on http://www.theleaseholdadvicecentre run by a Phillip Bazin, it was not the cheapest but I was impressed by their knowledge and speedy reply. They are not Solicitors but have solicitors working for them.
2. Cost was £2550 plus vat for 18 flats, £150 plus vat per flat I think. This covered everything and in the end they had to serve notice on three companies.
3.Inform everyone of your intentions and ask if they agree. Although you need 51% it is best to get everyone involved as the cost can be split by all. We had two people who said no so the cost had to be shared by the remaining 16.You may also need to do some footwork to find owners who rent and I found asking the tennants for the managing estate agent a start as they can pass the information onto the owner.
It is at this point that I informed everyone that if they agreed we would refund the cost from the fund held by solitaire as I knew we had an excess of £12000+ hence the importance of finding out your account balance before you start.
4. I asked everyone if thay wanted to voluteer for a directorship and if they had any issues with me standing, you need three people minimum but to keep things simple we did not nominate a secretary.
5.It is also an advantage at the start to ask everyone involved for a single payment. We asked for two as http://www.theleaseholdadvicecentre ask for half at the start and half after the process is complete. In the current climate trying to get a second payment from people was difficult.
Payment was sent direct by individuals so I had no contact with personal bank details.
Just to answer some questions above.. yes you are responsible for the the outgoing property managers expenses BUT Solitaire did not reply witin the month and do not forget you already pay a substantial management fee. Solitaire use Websters accountants and last year the bill for our site was £395!
All solitaire are doing is winding up the accounts and the management fee is still charged until the date of change over so there is nothing for them to charge, it is part of what they do anyway.
What I would say here is that at the start of the three month period INSIST that all outstanding bills are paid before the end of the three month period and that any remaining are forwarded to yourself using the below law.
Section 94 of the Common and Leasehold Reform Act 2002 which provides that where the Right to Manage is acquired there is a duty on:
(a) landlord under a lease of the whole or any part of the premises,
(b) party to such a lease otherwise than a landlord or tenant, or
(c) a manager appointed under Part 2 of the 1987 Act in relation to the premises, or any premises containing or contained in the premises
TO PAY THE ACCURED UNCOMMITED SERVICE CHARGES ON THE DATE OF AQUISTION.
The LVT explains this as follows
Where the landlord has collected service charges in advance but not yet spent them all and is holding the remainder in atrust account, he is under an obligation to hand over all the unspent sums to the RTM company. These will not only include unspent charges but any reserve account or sinking fund. This does not require a notice from the RTM company- the legislation requires the landlord to act and to make a payment to the RTM company equal to those uncommited sums held by him on the aquistion date or “as soon after that date as is reasonably practicable”
The amount to be paid is the sum of:
# monies paid by the leaseholders as service charges; PLUS
# monies invested from service charge payments (and any interest); LESS
#the landlord’s outgoings on the provision of services up to the acquistion date.
I believe Arthur Dent is correct with regards seperate buildings.
We have purpose built flats but have three seperate blocks with one vehicle entrance. Mr Bazin served three notices, one notice for each block (three in total)to three seperate companies that solitaire are registered under, a total of 9 in all. You now begin to understand the complexities involved and the importance of employing a good solid company.
This avoids the three different RTM companies as suggested earlier.
6.If the process goes to plan and you are successful then you have three months before handover to prepare everything.
a.Open a bank account we used Santander using a main account and a business saver for the long term repairs/decorating fund or reserves. We agrred for one director to have a debit card and the two others to have operators cards just to access the account but not withdraw. The PIN number was set by myself but the card is held by another director together with the cheque book. This individual also keeps basic accounts.
c.Contact inland revenue as soon as can you to register for corporation tax. You can recieve a 5 year exemption as you are non trading and non profit making. This means you do not have to submit accounts to the revenue AS LONG AS ANY INTEREST EARNED IN YOUR BANK DOES NOT EXCEED £100 PER YEAR.
This way you can just employ a good local accountant to do the end of year accounts for transparency.
d.Source your gardeners if need be. A neighbour and myself agreed to do the rear gardens for the first year as long as people tended thier front gardens.
YOUR LEASE
Although it may seem obvious please remenber you have only been granted the Right to Manage and you must still abide by the covenants of the lease.
Check your external decoration clause, is it every 3,4,or 5 years?
Get a quote and factor the cost into your new service charge over the requires period.
For example ours is at our discretion so we planned every 3 years at a cost of £12000.
£12000 divided by 18 divided by 3 years works out to £222.22 per year.
And please be generous in your first year with your repair and maintenance budget as you know solitaire is excellent at upkeep!
Check your lease very carefully and quote it where you have had problems such as parking. We put a seperate letter together with the main points of gardens, parking, upkeep of outside areas, pets etc. That way people know where they stand from the start.
Thats me all typed out, oh you must buy the “RICS residential management code book” available from the RICS website as the information given is essential.
Any questions please ask
January 31st, 2010 at 11:23 am
ALSO
Transfer your new Company name across to the insurance documents via Ann Sturgess at Oval Insurance Broking direct line 08458 725 714.
Contact the electricity company for communal supply and do the same. Solitaire have just moved the account from British gas to EDF and I do not have the details however head of accounts can forward this
January 31st, 2010 at 12:09 pm
Answer to Archangel: This is a tricky one. The simple answer is that your lease reminas unchanged by the RTM process. The RTM company becomes responsible for all the covenants. It is possible to vary your lease – as in extending it, and that can be done individually and that’s not a RTM issue. But nothing in your lease changes.
The lease is between the freeholder (I think some people call this the landlord) and the flat owner or lessee, so removing the property manager does not change your relationship with the freeholder. It just places the choice of managers in the RTM’s hands as opposed to the freeholder’s.
If in any Consesnus Group company is your freeholder, and that is highly likely it doesn’t really matter, you’ll still pay the freeholder its ground rent.
Most of our develpoment was originally sold off plan, so another company was established for the purpose of the leaseholders most of whom signed their leases before a managing agent took over – about seven months after people moved in. Solitaire became the director of this ‘additional’ company, and we all own one share in it. When the RTM was invoked Solitaire stood down as director of the ‘additional’ company and transferred all the paperwork to the RTM co. Our RTM co then stood collectively as the director of this ‘additional’ company. It sounds like an extra layer of nonsense, and we may now be able to wind this ‘additional’ company up, but only because we achieved 100% RTM co membership.
Of course the alternative is collective enfranchisement, where you buy the freehold and CAN remove ALL links to C Group. We started this process but it’s more complex than RTM because you have to get an experienced surveyor to value your develpoment. This costs about £1000 for a 30 flat or 2 acre develpoment. The freeholder will offer a sale price that you won’t be surprised is considerably higher than your surveyor’s valuation. In our case a £60k difference.
As soon as that happens you have to start the legal process to get the price agreed. If I remember correctly, enfranchisement is also a right but there are set legal steps to follow to finally agree the price. It would have cost us about £5000 per flat, just for a share of the freehold and there are legal costs up front.
You still take over in the form of an RTM company (you have to pay all those costs as well) so it’s complex and possibly costly.
However, once you have invkoed your RTM you can subsequently buy the freehold.
I’m not sure if that answers your question, but come back and ask if I haven’t.
January 31st, 2010 at 12:31 pm
Thank you ANON. Your situation sounds extremely complex!
I am referring to a situation where the developer hung onto the freehold and appointed a CBG company as Manager from the outset, so they both feature in the lease. The convenant / restriction that I refer to is the one that states that the Manager has to be contacted and give consent before a leaseholder can sell to ANOther. But once a RTM takes place the original CBG ccompany is no longer legally responsible for the management of the block, but the new RTM company needs to be informed and give consent if a leaseholder wishes to sell as well as their may be outstanding service charge debts that need to be settled before a sale can proceed.
Looks like a grey area to me – best bet for a definitive answer is probably the Leasehold Advisory Service.
Moving onto Collective Enfranchisement and Right of First Refusal – this is a real can of worms, but one that I think the majority of leaseholders need to consider at some stage, especially if there is a ground rent review period specified in the lease.
The gobbling up of freeholds seems to be rife in the UK. It amazes me that thesed “freehold purchasing companies” seem to have no difficulty in raising loans from the banks for this practice, whereas the leaseholders themselves are denied their request for an additional loan on their mortgage to buy their own freehold collectively (possibly because of negative equity)
January 31st, 2010 at 12:59 pm
Archangel
For issues like this you can use the excellent http://www.landlordzone.co.uk
I urge you to have a look and anyone else including Admin.
January 31st, 2010 at 12:59 pm
Reply to Archangel: With new build develpoments, you tend to find that the builder (in our case a big PLC), becomes the sole shareholder in the freehold company, that company’s ‘agent’ is sometimes Estates & Management. E&M shares directors with Solitaire and the freeholder. they’re all wrapped up in PPMG and that’s now part of Consensus: It’s a cosy little arrangement and that will only change with legislation.
As I say, your lease doesn’t change, it’s sort of archived in its origial form, and updated by the Mems & Arts of the RTM company.
You could compare it to s statutiry instrument being used to amend or update existing legislation.
If you want to sell, re-mortgage or sub-let, I’m sure the freeholder will often make a charge, and effectively give ‘permission’. I think E&M charge £150 for re-mortgaging becasue they do have to supply certain paperwork.
But as I’ve recently discovered, the RTM company can have a say in things like subletting because it also becomes an agent of the freeholder. One EG: The RTM can change the buildings insurance (we’ve halved our policy) but it has to make sure that the freeholder’s not put at risk by an inferior policy, and notify the freeholder.
I’m sure more of these issues will become apparent as RTMs grow, but the easiest thing is to get the best advisers you can on board, as soon as you take over. We’re paying £90 a year to have our company office registered at a firm of accountants/auditors. If a solicitor for a prospective buyer needs to find out about the RTM co, he/she contacts the auditor and not me. The new managing agents will collect the auditor’s fees from all residents and pass on to the company.
The key to all this, is that issues beyond RTM can be as much of a headache as those prior to taking over. But the savings are worth it.
January 31st, 2010 at 1:02 pm
Anon
What company are you using for the companys reistered office etc. This is something I need to do.
Thanks
January 31st, 2010 at 1:09 pm
How do you find out who your CURRENT freeholder is?
It has to be displayed on your service charge bill (often in small print) along with its registered office – this is a requirement of the Landlord and Tenannt Act 1987. Sec 47/48 I think.
I say current freeholder because in our case it changed three times in the first four years of the block being built, and you won’t be surprised to learn we were not automatically offered a chance to buy it.
January 31st, 2010 at 1:12 pm
The freeholder for most of Solitaires properties as I am aware is Estates and management. The address (I think) can be found under the heading “The Peverel group of companies”
January 31st, 2010 at 1:19 pm
Answer to JD: Hi Jon, I’m not going name the company on here as our RTM is still quite recent and I don’t want to give away too much. But most mid-size accountancy firms offer the registered office service from about £90 to £200, or £500 (for a medium sized City of London firm). I’d go for a local firm, ours is also going to audit the service charge accounts of our new property managers although that’s about £500. Just make sure your new managing agents factor these costs into your budget so they’re collected in advance with the service charge.
You have to notify Companies House that you’ve moved the reg off.
January 31st, 2010 at 1:26 pm
Anon
Thank you.
We do not have new property managers so I guess that does not apply.
We are managing ourselves and our accounts will be audited locally for £50 but it would be nice to have someone to fall back on when any property is sold.
January 31st, 2010 at 1:31 pm
More on Freehold Companies: Here’s a note of caution – the whole freehold thing is so complicated. Strictly speaking E&M are not the freeholder, they are one company that acts for many freeholders. Or a freeholder’s agent.
If you ever have any legal correspondence with E&M – even if you notify them you’ve started a Residents’ Association, they will reply “We are agents for the service of notices etc…” or something similar.
There has been much written on this thread about the pros and cons of using lawyers for the RTM – but the Section 79 notice – the notice of your claim to right to manage MUST be served on your freeholder in NAME and not the agent. Of course it is posted to the agent’s office. This is really important and if you’re not sure, I would suggest seeking legal advice.
Serving notice on the wrong company is not a good idea. Don’t give the freeholder ANY excuse to file a counter notice becuase your only available course fo action then (within 8 weeks of receiving it) is to make a claim to the LVT.
January 31st, 2010 at 1:35 pm
To Jon: If you’re self managing, how many flats and who’s going to collect/chase your neighbours when they fall behind with their charges? I’m interested in this route to RTM which I’m sure is fine if there’s five of you and one’s a solicitor and one’s an accountant. Are you making yourselves “employees” of the company so you get paid?
January 31st, 2010 at 1:53 pm
Anon
We have 18 flats.
One issue that I did not add to the previous long post was arrears.
You muast inform all residents at the beginning of the 3 month waiting period that even though all current service charges have been suspended once you take over all debtors must cover thier debts.
I requested copies of all lessees statements and then forwarded a copy with the letter covering lease covenants that had not been upheld by Solitaire.
These debts have been added to the current service charge.
The standing order form from the bank allocates each address a code so you can see who has paid or not as the case may be.
Any debtors wil be informed and the legal process followed to the letter. The last resort is then to employ a debt collection agency who charge the lessee for collection so it is totally out of your hands so to speak, they charge the lessee for the service not the RTM company.
The first stage for them is to contact the lessees mortgage company as the mortgage is tied to the service charge being paid. Any unpaid service charge negates the mortgage and ultimately the lessee can be evicted.
Everyone who agreed is part of the company but not registered at companies house only the directors are registered.
We do not get paid in any way as this would get too complicated although I have recieved 2 bottles of wine for my services!
To recieve corporation tax exemption you must be non profit making.
After 12 months we will assess everything and make the appropriate changes.
January 31st, 2010 at 2:29 pm
I was thinking about asking if people could provide the names of insurance companies they have approached to seek more favourable quotes from, but having now clicked on the link to http://www.landlordzone.co.uk as posted by Jon Dyson earlier today, I seem to have quite a few to choose from…!!!
So I will ask, as there’s such a long list – which insurers have readers obtained quotes from (or even actually taken insurance out with)…??? Are there any that are better than others, or conversely any that should be avoided…???
I’m seriously considering getting quotes to see how Kingsborough compare on the insurance cover for my development (although I think I already know the answer…), so any pointers in the right direction would be gratefully appreciated.
January 31st, 2010 at 2:36 pm
Matt
Lansdown insurance brokers in Cheltenham
January 31st, 2010 at 3:32 pm
Thanks Jon. Perfect starting point, as I’m in Gloucestershire too…!!!
January 31st, 2010 at 3:34 pm
No worries. Anything else I can help with just ask.
January 31st, 2010 at 3:44 pm
Matt
Ask for Tim Davies or email timdavies@lansdowninsurance.com
January 31st, 2010 at 3:48 pm
Matt
You will need a rebuild cost or insured cost from your current insurer whose direct number is in this thread, Oval insurance.It is on your policyunder Sums insured…. Buildings.
January 31st, 2010 at 3:50 pm
Keep forgetting things!
If anyone does go RTM just to cover yourselves it is worthwhile getting a rebuild cost from a chartered suveyor. This way your insurance will be accurate and it is then automatically indexed linked every year.
January 31st, 2010 at 3:58 pm
Jon,
I’ve completed the “Request A Quote” form on Landown’s website – I have a copy of the current insurance certificate which includes the insured cost of the development. The current policy is provided by Zurich, but the broker is indeed Oval Insurance Broking Limited.
I await a reply from Lansdown with great interest…!!!
January 31st, 2010 at 5:25 pm
Some thoughts about buildings insurance: If you invoke your RTM, the freeholder cannot stop the RTM co changing the buildings policy. Ours went from £9k to about £4k.
If you don’t want to go the RTM route, you can set up a Residents’ Association, and provided it’s properly constituted and you send your details etc to the freeholder it will recognise your assoc. In my experience the freeholder will not even discuss issues that affect everyone with a single lessee. So it takes a bit of organising but nowhere near as much as RTM.
If your freeholder’s agent is E&M, they are pretty good at dealing with phone calls and responding to letters. Yes they’re linked to PPMG (and Solitaire) via some shared directors, but they exist to look after the freeholder. They will write to you and confirm recognition – I believe it’s part of the Landlord & Tenant Act.
By setting up a RA you can also test the water for enfranchisement or RTM at a later date.
A quick look at the RPTS web shows LVT hearings over disputed buildings policies. Some types of LVT hearing require you to pay a fee, some you don’t. I’m not sure about insurance related hearings.
If you get your own quotes and you put it to the freeholder to change the policy (no point putting it to Solitaire as they will only change on the say-so of the freeholder); and you do that as an individual, your request will probably fall on deaf ears as the onus is on residents to form a recognised RA to even begin the process of negotiating.
Of course RTM gives you much greater control, and I know I’ve said a lot about legal fees on this thread but if I added up the total I had spent on RTM fees, setting up company and so on, the savings in just the buildings policy alone would repay my legal fees in just two years worth of charges.
Reply to Jon Dyson: Jon sounds like you’ve really immersed yourself in RTM by physically managing your block. Good luck with that. Manangement fees, even with a cheaper company can be the second highest expense p/a after buildings insurance, so although you’ll have all the responsibility you’ll have much greater control and much much lower bills. You should write something for this site after a year “at the helm” and tell us how you got on.
January 31st, 2010 at 5:51 pm
Hello all – this seems to have set off a whole new set of issues and queries, but good to see people being so helpful to each other as I know (especially for those whose professional/working background may be unrelated to all this leagl and quasi-legal stuff)how very perplexing it can be and how precise the law is with regards to procedures and timings.
Good luck everyone – yes there is life after Solitaire, Peverel and CBG!!!!
January 31st, 2010 at 6:05 pm
Anon
Thank you and I will do that and continue along the way to help people as they need.
I have had to learn the hard way as I went so I would not want anyone to have the frustration I have experienced.
I will redo all the information on this thread when i can and ask Admin if they can check it and put it as a stand alone that can be used by all and edited as required.
Other sites I have used have built up template letters for people to access and I think this maybe an excellent next step as momentum gathers.
February 1st, 2010 at 4:54 pm
Draft on Pre RTM preparation.
Please do correct/add any additional info to make a winning formula. (if anybody got time to edit my postings that will be much appreciated otherwise I am afraid you will be subjected with my bad English. Please admin forward my e-mail if help offered)
Information is complied from TTAS contributors as follow:
It is utmost important that correct criteria is followed. If you fail RTM then you will be punished by not letting you reapply for years.
1.Check if the building is right for RTM
If there are more then one block then one can apply for RTM, however all the rest of the leaseholders in other blocks must be served notices too.
If anyone has more info on building requirements please help.
2.Form an Association of leaseholders which requires 51% membership.
3.All the leaseholders name and contact details are required of the block/s as non members need to be served notices as per requirement of RTM. Someone has already given pointers in the past tag how to go about and I will try to contribute further.
4.Once all the above listed items are in place then you are ready to form your Limited Company which needs the Article of Association. There is no need for other memorandum any more. Now is the time to hire a solicitor if need to. Finally the Limited Company must be registered at The Companies House. There is nominal fee for registration and fee per year.
5.New Management Company needs to be in place. Have a contract ready for the Management Company and between you. Basic one can be used from RTM.
One can self manage but to remove any OBJECTIONS FROM THE LANDLORD IS VITAL TO WIN RTM, therefore, it would be recommendable to hire a Management Company on trial for 3 to 6 months. Having said that it creates a lot of changes but does gives time for you to prepare for final take over if you are not professional as lawyer, accountant and so forth.
I managed a block for 3 years in 2006 and was on the management board as a director and company secretary, provided in house all the services such as:
Accounts – we had an accountant to finalise the books and audit and used his address for registering the company address. We were lucky that our lease already had Limited Company and leaseholder Association which gave the power to appoint Management Company. There was no reason to go to RTM. In house services were:
Issuing shares
Debt collecting
Conveyance work when the property is bought and sold from one leaseholder to other
Dealing with anti social behaviour, drug dealers and so forth, for the few months it was a battlefield which I won even suffered attempted attack and threats of all sort. Once trouble maker knew we had zero tolerance, remaining within the law and cannot be touched they left one after the other. Now I have left and replaced with a solicitor who has a easy job to carry the work.
I may write later and you must wait for that. I was lucky to have a right hand director, who computerised the system and a volunteer, who was retired general manger, who edited my English, admin work, kept a watchful eye in the block and above all kept me on straight and narrow. I charged for the services 10% without VAT on my company name. If others agree then the services can be provided for non payment of the service charge which is better for tax proposes. I put far more hours for providing the best money can buy then I was charging. You have to charge otherwise every one is saving far more at your back and who knows you will be blamed for all sort. The problems may come from ex management company supporters or new ones who wants take over the Management to skim off the money.
6.Make sure you have sufficient funds to finalise RTM process. If you need solicitor then you have to pay in advance.
Here admin to consider supplying templates and info and may be campaign:
1.How to go about getting names and addresses of each leaseholder in the block/s
2.Contract between a Management Company and the Leaseholder Company/ Association
3.The Article of Association
4.To start a campaign that all the builders must have in their lease already formed Limited Company with the Article of Association which gives power to the owners to appoint Management Company. Finally, all the land must be sold as a package when the properties are sold to the owners. Landlords to be vanished for good. We need to reform from the root rather then fighting the right to manage and buy the land back from the landlords.
Your in put is vital especially from those who failed and the reason why
February 1st, 2010 at 5:39 pm
Reply to Nicky: this is a fair assessment of the RTM process but there are quite a few variables.
The absolute first thing is to establish that at least one person is prepared to stand as a RTM company director and informally try to work out if there’s enough interest before setting up the company.
The notice served on neighbours inviting them to participate in the RTM process, is actually served in the name of the RTM company or in essence its director/s. The company shoudl grow in size until you achieve just over half.
ADMIN: Is it possible to provide a link to the Leasehold Advisory Service’s RTM guide (in addition to Lease’s home page)? This provides a full step-by-step guide, and a summarised timetable at the end. Or you could cut and paste the summary into a new posting?
And Re Point 6 (4) above… some leases do provide such a company. We couldn’t use it to take over the RTM as it included some freehold houses.
Finally I can’t stress this point enough: but the CALR Act 2002 is still very new in terms of establishing case law so don’t be surprised if there’s something about your block or develpoment that might raise questions to which there are not immediate or legally guaranteed answers.
Because you don’t need to prove the freeholder or its management company negligent it IS your right to take over management. But the freeholder will in turn want to make sure you’ve done all the admin correctly, and within the timetable of the 2002 Act. A quick look at some RPTS decisions will show some of the fundamental mistakes RTM cos make, such as including non-company members in a claim notice.
Also the definition of a qualifiying building can be open to interprtation and I’ve heard fo cases where pre-tribunal reviews have involved the LVT panel visiting a site and measuring the distance between building boundaries.
Finally, you can appoint a new managing agent on what ever terms the company sees fit, and it is advisable to have a three month notice period in your contract so you can change company if you need to. I’m sure most people would research their company first, and probably give them a year to settle in.
February 1st, 2010 at 6:46 pm
Thnak Anon for excellent advice. I was unable to log this info and hope it goes this time.
Draft on RTM Company Process
Please do add or correct to make it winning formula. Let us all work together and accept offering what ever form they come even written in bad English like mine.
Right to mange is a right which landlord can not object if the right criteria are followed.
Once The RTM Company takes over then
1. Accounts are frozen
2. No new members can be accepted so it is important to have 51% before serving notices by RTM Company. You must have name and addresses of all the leaseholders. You have correct name and address of the freeholder/landlord.
It will be advisable send by registered mail so it can be proven it was sent. Make sure it is LANDLORD itself, whose address will be found at the bottom of the letter head. Receiving invoice or correspondence from a company for ground rent does not mean that they are the landlord as they could be appointed agent. As our management company keep changing names so make sure RTM Company is serving on the right name and address or you will fail.
The RTM Company process:
1. RTM COMPANY serves SECTION 78 on the NON MEMBER OF the COMPANY to join ( that is why it is important to have all names and addresses prior to RTM process or you will fail) after that membership is frozen and no one can join.
Time period allowed to join after serving notice is: 14 days
2. After 14 days RTM COMPANY serves SECTION 79 on the land lord at their registered address which you should already know to serve.
Time period allowed after serving notice is: 1 month and the last date of the month is known as the Determination Date.
RTM process is complete if there is no response from the freeholder or objection lodged.
The power to mange the property will be affective and resume after 3 Months from Determination Date. Only now you have the right to join new members/shareholders on the board.
Time taken is = 14 days+ 1 month +3 months
Total time would be 4 months and 14 days if every thing goes as planned.
OR IF LANDLORD OBJECTS and puts COUNTER NOTICE:
Time period to find solution: 8 weeks to lift the objection otherwise you will fail. You have to go through LVT to log your defence. To transfer the power to manage can only then happen after the LVT hearing which is likely to be a minimum of 10 or more weeks or freeholder with draws the objection. It will be very costly business so make sure your papers are in order and you have back up plan if things go wrong.
Total time taken: 14 days+ 1 month+8 weeks+ 10 weeks or so for LVT hearing.
Total time would be = around 9 months or so.
I believe our Management Company will be a fool to object. It will be useful to hear from the leaseholders who failed so we can iron out any objections prior to filing for RTM Company.
Here admin to consider supplying templates/info for:
1. Do and don’ts to be a win the right to mange.
2. Templates of how to fill section 78 and 79 even a few filled examples so it can be followed to T.
3. In house solicitor to give advice if landlord objects.
4. To down load a programme for accounts purposes which keeps all the rerecords of whole accounts for the building and individual flats including invoices and statements directly ready made to down load and send. Ready made templates for sending debt collecting letters and notices and so forth. A complete package for self management so one can hire someone for a few hours to log the information if need to.
Your in put is vital especially from those who failed and the reason why.
February 1st, 2010 at 9:52 pm
If you’re thinking of invoking your RTM, then there are lots of contributors to this site who have been through the process. Providing forms and software for people to download sounds interesting – what does Admin think about the feasability of this task? – it’s quite a complex proposal.
You can buy the RTM forms from Oyez: http://www.oyezformslink.co.uk/f_chapters/90.htm
But as I’ve said here you can do most of the admin work yourself and get a solicitor to serve the notices thus reducing costs. By admin I mean download or simply get your neighbours to photocopy the lease, and unfortunately that means every page – even if the content is the same for each flat. I think you need the Land Registry Title Entry as well – that’s downloadable.
The existing property manager or freeholder must supply a list of tenants – but this sometimes is not up to date. If your block is set up in such a way that each tenant holds a £1 share in a company, and that company is represented by a property manager, the tenant bit of the company will have accounts filed at Companies House listing all the members and their addresses, also downloadable.
The RTM company has to go to exhaustive lengths to ensure notice of participation can be served on neighbours. For example if a flat was empty for six months and the only address you have is for the flat as opposed to the owner – you could find that you have to place an ad in Estates Gazette or a local paper in order to demonstrate you have tried to find the owner.
That’s why the minimum timetable is probably not achieveable save for the smallest of blocks. The claim notice alone for our block extended to 12 pages. Doing the admin leg work ourselves took three months. I really, really, would strongly advise anyone of thinking of doing this to get some legal advice. The savings on your service charge bills should cover the legal fess within a couple of years.
If you serve notice yourself, receive a counter notice and you have not got a solicitor. You’ll have to find one, sign their terms and conditions, go to their office with your passport to be witnessed (half a day off work possibly). Have the cash to place on account. You’ll need copies of the leases, and most crucially: plans for your develpoment, although there is usually a copy in your lease. As I’ve also said, there is a reluctance on the part of some solicitors to appear at LVTs. Some do, but don’t automatically assume they will. Once they’ve got all that, only then can they start your claim to the LVT. The claim to the LVT has to be written in legal English following the strict guidance from the tribunal there is no form for this, you need all the notices and it has to be assembled and paginated in chronological order. And don’t assume your LVT application will be fast tracked (heard in ten weeks), if it is complex and therefore standard tracked it takes much longer and sometimes you need a pre-hearing to gather the facts adding months to the process. In some case hearings are dealt with without either the applicant or respondant attending, but both parties have to agree to this.
From my experience the solicitors of property managers will take advantage of the fact that you don’t have legal representation – they will probably file a counter notice on the last day of the deadline, having sat on it for three months, or ignore letters about negotiating a solution. The counter notice must be served on the RTM Co’s registered office, so this could further delay matters: for eg, a resident who was away when the notice was served.
I hope that helps, and if you’re driving the RTM process and work. Or work in a job where you can’t take calls during the day you’ll be further disadvantaged. But RTM is an excellent solution so don’t be put off.
In my opinion, it’s best to avoid the prospect of an LVT (more time off work) and make sure you stick to the absolute letter of the 2002 Act.
I’d like to hear how people have got on if they have done RTM without legal support. But even though we have two directors, a RA cttee of 3, a city of London solicitor and the opinion of two barristers (one direct access), I reckon I’ve spent two hours a day on the RTM process for the past six months, and about three hours a day for the six months before that – and we’re talking about a medium size develpoment of 40.
February 2nd, 2010 at 10:04 am
We obtained RTM without legal support. Filling the forms in was a bit of a brain-ache, but actually much simpler than it looks. Only expenditure was forming company (about £60). Solitaire’s response was slow, grudging and unprofessional, i.e. no written confirmation, one telephone call from an uninformed minion … but they didn’t object, so the RTM is automatic and it took effect on 1.1.2010. We have just received belated confirmation by email (after several other emails and recorded deliveries went unanswered) and are awaiting refund of reserve (thanks in part to Jon Dyson). It’s only a three-maisonette complex, so it has been easy to co-ordinate. Management companies have come to accept that RTM is a fact-of-life and there’s little they can do stop it.
February 2nd, 2010 at 10:37 am
Seems the Right To Manage process is starting to be undertaken more & more by Solitaire-managed developments. At the moment the loss of these developments probably isn’t hurting them much (if at all), but as more developments sack Solitaire as their managing agents, at some point effects will be felt…..
If every development completes RTM, then Solitaire would have nothing left to manage, and would therefore become surplus to requirements. Which frankly would be nothing more than they deserve…..
Admin – can you set up a counter, to log how many developments have successfully completed RTM (and how many individual properties are involved), together with ones that are currently going through the RTM process (and again, number of individual properties involved). Obviously there’s Paul’s little development of 3 units that’s completed RTM, and Jon Dyson’s development (which is somewhat larger, I think…???), but how many more are there…???
You’d presumably need help from contributors on this website to provide details (or perhaps you already know?), but I’m sure there’s plenty of willing helpers ready to provide details, as required…!!!
Would be interesting to know the figures. Might also help Solitaire & co. to realise that they are slowly losing properties, and therefore opportunities to make money, and therefore perhaps they might pull their fingers out to get things done, in order to deter other developments from heading down the RTM route, further cutting their revenue streams…..
February 2nd, 2010 at 10:47 am
Nicky
As previously mentioned your accounts will not automatically be frozen.
On the day (1 month after serving notice to Solitaire)Solitaire lose the right to appeal there ia a further three month period before Solitaire hand over.It is essential on this day that you inform your property manager that this three month period is their time to consolidate all accounts and prepare a final closing balance. Also inform them that by the end of the three month all block insurance details and communal electricity supplie details MUST be transferred to your new Company name and quote
Section 94 of the Common and Leasehold Reform Act 2002 which provides that where the Right to Manage is acquired there is a duty on:
(a) landlord under a lease of the whole or any part of the premises,
(b) party to such a lease otherwise than a landlord or tenant, or
(c) a manager appointed under Part 2 of the 1987 Act in relation to the premises, or any premises containing or contained in the premises
TO PAY THE ACCURED UNCOMMITED SERVICE CHARGES ON THE DATE OF AQUISTION.
The LVT explains this as follows
Where the landlord has collected service charges in advance but not yet spent them all and is holding the remainder in atrust account, he is under an obligation to hand over all the unspent sums to the RTM company. These will not only include unspent charges but any reserve account or sinking fund. This does not require a notice from the RTM company- the legislation requires the landlord to act and to make a payment to the RTM company equal to those uncommited sums held by him on the aquistion date or “as soon after that date as is reasonably practicable”
The amount to be paid is the sum of:
# monies paid by the leaseholders as service charges; PLUS
# monies invested from service charge payments (and any interest); LESS
#the landlord’s outgoings on the provision of services up to the acquistion date.
This will save you alot of work.
Hope this helps
February 2nd, 2010 at 12:29 pm
More on contracts and reserves post RTM: Remember that many contracts will be paid upfront from the previous year’s service charges. So if your RTM became effective on 1 Feb 2010, your buildings insurance might have several months to run, which has already been paid for along with other maintenance contracts.
Althought the property manager has to serve notice on contractors, and the RTM process effectively cancels existing contracts between manager and contractor, it would be unwise to cancels all contracts in one go. Especially if your block contanis lifts, water pumps, powered access gates, entry phone systems as so on.
This would also be extremely unwise if you are self-managing.
If you’re insured via a PPMG (Peverel) broker, your new manager should be able to find a cheaper quote. Likewise with electricty supplier as many of these things are just set up and never properly managed, checked or improved upon. It’s not PPMG who are out of pocket but YOU the service charge bill payer.
Jon above refers to an excerpt from the RTM guide, available online from the Leasehold Advisory Service, but I think where he mentions LVT he’s referring to the LAS.
If you can’t get your hands on your reserves, the LVT is the next option, but the tribunal takes a dim view of this route being the “norm” as opposed to the “exception”. In fairness to any property manager, they might have outstanding bills to be paid. Although funds should be transferred on acquisition day the law actually says (Sec 94 (4)): “..on the acquisition date or as soon after that date as is reasonably practicable.” Which can appear a bit vague.
You have to tread a fine line, otherwise if you wait for a tribunal hearing that could take a minimum of 10 weeks,in which time you might not have any cash to run your new company.
February 2nd, 2010 at 12:58 pm
Anon
Sorry my post was a little confusing.
Solitaire pay the insurance over I believe 6 months and we still have until March to run (RTM granted 25/11.09). My point was to perempt Solitaire and Oval (insurance broker used by Solitaire)to change the details on the policy otherwise it is useless.
Solitaire will hold a portion of the reserve fund back to cover these costs but again from my experience nothing was done until I requested it on the hand over date and we are still discussing some bills. Solitaire have three months to consolidate and produce a final closing balance The more information Solitaire send the more confusing it becomes.
Indeed it would also be wise to request Solitaire hold a small sum back until you have had time to check all the accounts.
And when you request an account balance after the first month (when and if Solitaire do not appeal against RTM)make sure it is requested from the accounts department not just a guess from the property manager, ours was £4000 out?
Once you have this balance you can work out if you have adequqte funds to run the company.
What you can do is request any further service charges are suspended together with any planned non essential works. We cancelled the external decorating after we had quotes on average £3000 cheaper.
The Section 94 quote came from a request to my MP and came from The House of Commons library and is from a publication from the LVS so my apologies for that.
April 4th, 2010 at 8:39 am
This is a bit off the core of the topic but just a reminder that because RTM is not fault-based, the freeholder is entitled to be part of the newly-formed RTM company.