Right to manage – all you need to know

Introduced through the Commonhold and Leasehold Reform Act of 2002, the Right To Manage (or RTM, or right to management), offers leaseholders in a property to take over the management of the building, even without the agreement of the landlord. Though this may be a scary notion for landlords and letting agents, it’s important to take a closer look at what that can mean, the costs, the benefits to tenants, and the process.

What is ‘Right To Manage.’

Right To Manage (RTM) offers leaseholds the right to take over the management of the property by setting up a specific type of organisation (called a right to manage company). It’s not necessary for the leaseholders to gain landlord approval, to prove mismanagement, or even to seek out a court order. However, RTM companies do have very real responsibilities that they have to meet. These responsibilities include managing and collecting service charges, upkeep for communal areas and building structures such as the roof, as well as handling complaints.

The process

To qualify for RTM, the building must be at least partly self-contained, have at least two leasehold flats within it, have no more than 25% floor area that isn’t residential, and must have at least 66% of the leaseholders having leases that are longer than 21 years. Furthermore, more than half of the leaseholders that quality has to be in favour of forming an RTM company.

It takes around five-to-seven months to register an RTM, and notices must be served in accordance with the law to make sure that the company is fully compliant with all the relevant regulations. It’s easy to miss out on some of the more technical aspects of the registration, though the process is relatively straightforward, so it’s usually recommended to do so with the help of a property management company.

How much does right to manage cost?

The costs of setting up an RTM can depend, as they have to follow specific formats under the law. Information has to be downloaded from the land registry. For each title associated with the property, it costs £3, and there are postage costs for sending the necessary notices that have to be served. Photocopying costs for keeping copies of notices and other documents must also be considered.

There are also claim notice costs, and costs for the tribunal to determine if the leaseholders have the right to form an RTM. These costs are only incurred if the leaseholders aren’t found entitled to the Right to Manage. To find out the specific costs, it’s important to ensure you’re working with a professional, experienced property management team who understands the Right to Manage process and the specifics of your property.

Is Right to Manage a good idea?

For disgruntled tenants and leaseholders, a Right To Manage Company can allow them a much more direct control over the property that they live in. It can cut down on delays on repairs and maintenance, and allows you to be involved in the decision making process of how your money is spent. If the leaseholders are willing to take on the responsibility, they may find it worth it.

Want to find out more? Get in contact with our property management team in Kent, London, or Milton Keynes. 

Find out how we’re changing the face of property management... Our 2019 Brochure