RTM
The Commonhold and Leasehold Reform Act 2002 provides a right for leaseholders to force the transfer of the landlord’s management functions to a special company setup by them – the right to manage company.
The right was introduced, not just as a means of wresting control from bad landlords, but also to empower leaseholders, who generally hold the majority of value in the property, to take responsibiliy for the management of their block.
The right to manage is available to leaseholders of flats and not houses.
However, TTAS are in the process of sourcing details of how freehold house owners can fight to replace their property management company and we will publish details soon.
The process is relatively simple. The landlord’s consent is notrequired, nor is any order of court. There is no need for the leaseholders
to prove mismanagement by the landlord. The right is available, whether the landlord’s management has been good, bad or indifferent.
The right is exercised by the service of a formal notice on the landlord. After a set period of time, the management transfers to the right to manage company (the RTM company) which has been set up by the leaseholders. Once the right to manage has been acquired, the landlord is also entitled to membership of the company.
However, there are important issues to consider and a substantial amount of work to be done before service of the notice, if the takeover of management is to be successful.
We’ve provided a link at the bottom of this article to the ‘The Leasehold Advisory Service‘ document that we have quoted the above information from. This documents sets out the issues and the practical operation of the right, from first considerations to full management of the building.
The most important thing to remember is that for RTM to proceed, you need at least 51% of residents in favour of going RTM.
You can download ‘The Leasehold Advisory Service’ document that details all you need to know about ‘Commonhold and Leasehold Reform Act 2001 – The Right To Manage’ by clicking here.
