Leasehold property: the 'Right to Manage' :Cross Stitch – Home and community

If you own a leasehold flat, the management of your building is usually the responsibility of the landlord or a management company. You could take over this responsibility if you qualify for the Right to Manage. Find out if you qualify, the steps to follow and where to get advice.

If you own a leasehold flat and you’re unhappy with the management of your building you might qualify for the Right to Manage (RTM). This is where you and the other leaseholders can take over the management responsibilities from the landlord without having to prove bad management.

Management responsibilities include organising repairs and services, for example, gardening and lift maintenance, but not collecting rent or changing a lease.

If you qualify, you have to set up a company with the other leaseholders (called an ‘RTM company’). You’ll then need to ask the landlord to transfer the management responsibilities to the company. You and the other leaseholders can then manage the building yourselves or pay a managing agent to do it.

Get advice to make sure you qualify for the Right to Manage

To qualify, you need to meet certain conditions, including:

  • you hold a ‘long lease’, usually this means it was originally granted to last more than 21 years
  • at least two-thirds of the other flats are held on a long lease
  • a certain number of leaseholders agree to join the RTM company, this figure is at least half the total number of flats
  • the building contains at least two flats, you won’t qualify if you live in a house

Exceptions

Even if you meet all the conditions, there are times when you can’t take over from the landlord. For example:

  • your landlord is a local authority
  • more than 25 per cent of the building has a commercial use – for example, a shop
  • if you live in a converted property (not a purpose built block of flats) and your landlord is ‘resident’, usually meaning they’ve lived in the building for the last 12 months

Download ‘The Right to Manage leasehold property – a guide’ for the full conditions and exceptions.

You usually pay your landlord’s legal costs for dealing with your Right to Manage application. You can appeal to the Leasehold Valuation Tribunal (LVT) if you think these costs are ‘unreasonable’. This is an independent legal body that can settle certain types of leasehold dispute without the need to go to court.

Other costs include any legal fees and the cost of setting up the RTM company.

Your solicitor can tell you how many leaseholders need to join the RTM company

The basic steps are shown below. Download ‘The Right to Manage leasehold property – a guide’ for more detail. You can get the forms from your solicitor or a legal stationers.

Step one – you have to set up the RTM company

Get professional advice about setting up the RTM company; there are legal steps and fees involved.

Step two – membership of the RTM company

You have to ask the other qualifying leaseholders if they want to join the RTM company. To do this, send them a ‘Notice to Participate’. The landlord can join, but only after the RTM company has taken over.

Step three – ask the landlord to transfer management responsibilities

Send the landlord a ‘Claim Notice’ at least 14 days after step two. This document confirms things like:

  • a deadline for the landlord to respond, they must have at least one month
  • a date for the RTM company to take over, this must be at least three months after the landlord’s deadline

If your landlord is ‘absent’ (can’t be found), you can ask the LVT to approve your Right to Manage claim.

Step four – the landlord’s response

The landlord’s response is known as a ‘Counter Notice’. The landlord can:

  • agree that you have the Right to Manage
  • not respond
  • challenge your Right to Manage

If the landlord agrees to your claim or doesn’t respond in time, you will take over the management responsibilities on the date given in your Claim Notice.

The landlord can only challenge you if:

  • the building doesn’t qualify
  • not enough qualifying leaseholders joined the RTM company
  • any of your notices are invalid – for example, incorrect or missing certain information

If this happens, you can ask the LVT to settle the dispute. But, you should do this within two months of the landlord’s Counter Notice.

Step five – handing over management responsibilities

Before you take over, the landlord should:

  • tell the businesses currently providing services that the RTM company is taking over, this is called a ‘Contractor Notice’
  • give you details about existing service contracts, this is called a ‘Contract Notice’
  • hand over any unspent service charges to the RTM company, you can appeal to the LVT if you can’t agree the amount