Right to manage
Would you like to take overall responsibility for the management of your block, but still appoint professional property managers to run it for you? If so, then James Andrew Residential is here to help.
The Right to Manage (RTM) allows leaseholders to take control of their building, regardless of whether or not there is fault with either the freeholder or incumbent management company.
The Right to Manage is for leaseholders of flats considering running their block. It allows for greater freedom, consultation, understanding and input into communal expenditures; including insurance, cleaning and building and maintenance works.
The Landlord's consent is not needed, even in situations where Landlords are absent, you should be able to secure new management through RTM.
As a residential management company, James Andrew Residential liaises directly with the RTM Directors in order to ensure that their property is managed the way the residents wish it to be.
Our Services Include:
- Regular communication and meetings with RTM Directors
- Resident customer communication
- Online customer information and contractor management services
- Maintenance contracts preparation and control
- Supervision of building works and decorations
- Regular monitoring standards of maintenance
- Appointment of contractors to carry out cleaning, gardening, repairs, maintenance and redecoration
- Ensuring appropriate Buildings Insurance Policy is in place
- Estimating annual Service Charges
- Service Charge collection
- Regular site visits
- Preparation of Service Charge Year End Accounts
- Recruitment, management, salary, tax and National Insurance matters for on-site staff
- Company Secretarial Services
- Company Director Services
- Dealing with Consents and Notices
- 'Out of Hours' Emergency Helpline available 24/7 every day of the year
Qualifying for RTM
The starting point for the RTM process is to establish whether or not the lessees meet certain qualifying criteria. Thereafter, a specific "Right to Manage" company must be formed by the lessees. This company, once the process has been completed, will be responsible for the management of the building on behalf of the lessees.
There are a number of conditions that must be met for leaseholders to qualify for the Right to Manage:
- The right to manage may only be exercised by a Right to Manage company
- The building must be self-contained
- The building must include at least two flats
- At least 50% of the flat-owners must want to go through the process
- At least two-thirds of the flat-owners must have been granted original leases for more than 21 years
- No more than 25% of the total floor area of the building may be used for non-residential/ commercial use, excluding car parks and common areas connected with the flats.
- There is no limit to the number of flats owned by one person
- No past or present residence is needed.
The RTM Process
In matching the criteria, James Andrew Residential will through the use of independent solicitors, agreed to by you, help set up the limited Right to Manage company, a way to collectively and legally define you and other lessees.
Once formed, the RTM company will need to serve various notices to the freeholder and other lessees and a Memorandum and Articles of Association must be put in place. Lessees who are not members of the company must be invited to participate. Following a period after the invitation, a Claims Notice is served on the freeholder which gives them at least a month to accept or contest the claim.
The freehold landlord has the option to serve a counter-notice. In this notice, they will need to make an objection to the right of the newly set up RTM company in their proposal to take over the management of the leasehold property or residential block. In doing so, they will need to clearly assert justifying grounds for which the objection is made. If a counter notice is served, a Leasehold Valuation Tribunal (LVT) application may be required.
If referred to a tribunal, in this case, the RTM (Right To Manage) company is liable for the freeholder's reasonable costs. Provided that all formalities have been complied with properly, the procedure should not be complex.
Once the Right To Manage has been acquired, James Andrew Residential will assist the new RTM company in obtaining all of the information needed to manage the property effectively.
The Ongoing Relationship
The diagram below illustrates the relationship between freeholder, leaseholder and residential managing agent when the property is run by the RTM company:
How much does the RTM process cost?
The costs involved are dependent on a number of factors, including the size of the building, number of intermediate landlords and the total number of participating leaseholders. Clearly, the more leaseholders that participate the less the costs will be for each participant.
In addition to the legal costs, the leaseholders may have to pay certain disbursements, including the costs of an accountant, surveyor and Counsel, should a barrister's opinion be required on any technical issue.
Furthermore, the leaseholders would be liable to pay the 'reasonable' costs the landlord incurs in having to comply with the steps laid down by the legislation. Should the costs be deemed unreasonable they would be challenged. Please contact us to discuss in more detail.