1. The Right to Manage
The Right to Manage (RTM) allows leaseholders who are unhappy with their landlord/freeholder take over the management of the block, transferring the control to a limited company.
As a landlord the leaseholders in your building will send you notice if they plan to do this. If they’re successful, you’ll still own the building but they’ll manage it.
This means they’ll be responsible for the following:
- collecting and managing the service charge
- upkeep of communal areas (e.g. communal hallways and stairs)
- upkeep of the structure of the building (e.g. the roof)
- dealing with complaints about the building from other leaseholders
Qualifying leaseholders can use the Right to Manage for any reason – they don’t have to prove the building has been badly managed.
Right to Manage companies
To use the right, leaseholders must set up an RTM company and follow certain procedures. The RTM company can manage the building directly, or pay a managing agent to do it. As landlord, you have the right to be a member of the RTM company and to vote on decisions. You get at least 1 vote. How many votes you’ll get depends on how many flats you own in the building.
There are 20 flats in the block. 16 are owned by leaseholders. 4 are owned by you and rented out on assured shorthold tenancies. You get 4 votes – 1 for each of the flats you own and rent out. The RTM company must pay for any costs you incur during the management transfer process – even if it doesn’t end up managing the building.