Typically the freehold of a block of flats is owned by a separate landlord. However, the management of the building and any common parts may be the obligation of that landlord, a separate landlord holding a head lease of the block, a company made up of the residents or a separate management company altogether. Whoever is responsible for managing, maintaining and insuring the building will usually have the right to claim service charges from the leaseholders to cover the cost of those functions.
The Commonhold and Leasehold Reform Act 2002 gave leaseholders the right to get together to acquire the Right to Manage (the “RTM”) their block of flats provided certain criteria are met. This is known as “exercising the right to manage”.
Clarke Mairs LLP has extensive knowledge and expertise in the RTM procedure and can guide you through the whole process – from gathering together the tenants to acquiring the RTM – providing clear advice at each stage.
Below you will find some brief information about the RTM process and answers to our frequently asked questions.
In addition, some useful independent guidance on leasehold flats and the collective enfranchisement process can be found at www.lease-advice.org.
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For further information about the RTM process and a detailed quotation, please complete the contact form below. A quotation will be emailed to you within two working days. Alternatively, contact Joanne Rea directly on 0191 245 4835 or email@example.com for further information.
THE RTM PROCESS
The RTM Process is a reasonably straight forward process whereby the residents of the majority of blocks of flats are entitled to acquire the Right to Manage provided at least 50% of the flat owners take part. A “RTM Company” is incorporated which will ultimately acquire the RTM.
Qualifying tenants of all flats in the block must be invited to participate in the RTM.
Once the RTM Company acquires the RTM it takes over (and is responsible for) all the rights and obligations contained in the leases in relation to the management of the block. This does not include the payment of ground rent, the management of non-residential areas or forfeiture functions under leases which all remain with the landlord.
Importantly, under the Right to Manage the RTM Company does not acquire any ownership of the block. It simply takes on the rights of management which includes insurance.
FREQUENTLY ASKED QUESTIONS
Why should I take over the RTM?
In most cases leaseholders wish to take over the RTM because they are unsatisfied with the way the block is currently being managed. That may be because they are being charged too much, because the building is not being adequately maintained or for any other reason.
However, it is not unusual that leaseholders simply want to acquire more control over the management of the property.
If you have any issue with your block of flats and think acquiring the RTM may be the solution, give us a call and we can discuss this with you.
What if not all of the leaseholders want to take part in the RTM?
As long as 50% of the qualifying tenants take part in the RTM that is sufficient to acquire the RTM. However, other leaseholders who are qualifying tenants for the purposes of the legislation can apply to be a member of the RTM Company at any time.
How much will it cost us to obtain the RTM?
You do not pay anything to your landlord to acquire the RTM.
In most cases you will need to pay your landlord’s reasonable legal costs of dealing with the RTM.
In addition you will need to pay your own solicitor’s costs.
Does it matter that Clarke Mairs is not local to us or the property?
No – we act for people all over the country and abroad without any difficulty. Most communication takes place by phone and email and most documents can be emailed or posted to you.
I live in a development of several blocks. Can I acquire the RTM of the whole development?
The way the legislation is drafted, it deals only with individual blocks. Therefore, in order to acquire the RTM of the whole development, it is necessary to treat each block separately.
You may or may not be able to acquire the RTM of the common areas such as gardens and parking areas. This is something we would consider and advise you on as part of the RTM process.
What if my landlord doesn’t agree to the RTM?
Provided certain criteria are met (which is something we would consider and advise you on at the outset of any RTM matter) you have a statutory right to acquire the RTM. If the landlord does not respond to your Claim Notice within the time set out in that notice then you will acquire the RTM in any event. If your landlord disputes your right to acquire the RTM then you may make an application to a First-tier Tribunal (Property Chamber) for a determination that the RTM Company is entitled to acquire the RTM.
My landlord charges high insurance premiums. Will the RTM Company be able to reduce these?
Insurance of the building is a management function which the RTM Company will acquire when it acquires the RTM. It will then be the RTM Company’s role to source and put in place insurance under the terms of the lease.