Right to Manage

If you are not happy with the way your block is managed, you have the right to change it. The Commonhold and Leasehold Reform Act 2002 gives leaseholders the legal right to take over the management responsibilities of their property from the freeholder. This is termed Right to Manage – RTM.

To take over management, firstly a Right to Manage company will need to be set up.  To do this, certain criteria has to be met.

• More than 50% of the leaseholders must support the move
• Two thirds or more of the leaseholders must have leases on their property that were originally of 21 years or longer
• Not more than 25% of the floor area must be used for commercial (as opposed to residential) purposes

The RTM company will need to be set up either directly with Companies House or of course, we can assist you in dealing with the legal process for you.

Once the RTM company is established each leaseholder will be entitled to be a member of the RTM Company. Your freeholder will also be entitled to become a member of the RTM company and there are complicated rules for determining how many voting rights the freeholder will be entitled to.

Decisions will need to be made as to who the Company Directors of the RTM are going to be.  Directors have legal responsibilities that can have financial consequences so we would recommend contacting us for advice prior to agreeing to be a Director.

A Company Secretary will also have to be appointed who will have specific responsibilities in terms of submitting audited accounts to Companies House each year. The Company Secretary can be a leaseholder. However, often the Company Secretary is a representative of the property management company appointed by the RTM to manage the property.

The Directors must invite all leaseholders who are not members of the RTM company to join.

The final step is to serve notice on the freeholder.  It is essential that this is done correctly and in compliance with the legislation otherwise the Right to Manage request could be refused on a technicality.

If you have any query regarding Right to Manage, please contact us on 01926 491 181.