Developments that are considering RTM, may wish to be braced for the possibility of the landlord issuing a counter-notice.

A number of recent RTM’s have reported that the existing management company has issued a counter-notice without providing a full explanation to the counter claim.

To keep residents informed of what this means, we’ve published the following information that comes courtesy of the Leasehold Advisory Service website.

The landlord’s counter-notice

No later than the date specified by the RTM company in the Notice of Claim, the landlord(s) may serve a counter-notice. The counter-notice can do one of two things: either agree to the RTM or to allege reasons why the RTM company is not entitled to proceed. The counter-notice does not provide an opportunity to raise queries or to dispute the RTM on any other ground.

The counter-notice must be in the prescribed form and is limited to one of the two following statements:

• admitting that the RTM company is entitled to acquire the right to manage; or
• alleging that the RTM company is not so entitled and giving reasons to support the allegation.

If the landlord admits the right, the management will pass to the RTM company on the date specified in the Notice of Claim. Where the landlord does not serve a counter-notice, then the acquisition date for the right will be the date specified in the notice.

Where the landlord disputes the claim, the grounds for dispute are limited to:

• the building does not qualify; or
• the RTM company does not comply with the legislative requirements; or
• the members of the RTM company do not represent half the flats in the building.

The counter-notice must specify the reason for the alleged non-qualification by reference to the specific requirement of the Act and must state that:

• the RTM company may apply to the Leasehold Valuation Tribunal for a determination of the issue;
• the RTM company will not acquire the right unless the LVT determines in favour of the company or the landlord subsequently agrees.

The RTM company must make the application to the LVT within two months of the date of the landlord’s counter-notice. If the application is not made within this time, the claim is deemed to be withdrawn. There is no prescribed form but an application form, with explanatory notes, is available from the LVT.

The Tribunal determines whether the RTM company is or is not entitled to the right to manage. There is a right of appeal to the Lands Tribunal, by leave of the LVT or the Lands Tribunal. The LVT’s decision becomes final following any appeal or at the end of the period during which an appeal could have been made.

Source: Leasehold Advisory Service