More leaseholders seeking ‘right to manage’ after Law Commission review

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Solicitors are reporting a rise in the number of enquiries from leaseholders about taking over their freeholder’s management functions under The Commonhold and Leasehold Reform Act 2002, better known as ‘Right to Manage’ or RTM claims.

The claim is made by legal firm Blacks Solicitors whose Partner Anushka Nicholas (pictured) says advice is needed in several areas including, prior to the commencement of a RTM claim, because some groups face difficulties in acquiring up-to-date management information from the freeholder, much of which is essential to taking responsibility for the property.

“Leaseholders have become more aware of their rights since the Law Commission’s proposed reforms to leasehold law were announced in July 2020,” she says.

“As a consequence, more leaseholders are exploring the possibilities of RTM in an effort to take more control over the management of their flats.

“RTM claims are a no-fault right, meaning that they are not reliant on proving bad management by the landlord.

“Assuming the leaseholders fulfil the criteria and follow the statutory procedure, there is a very limited scope for landlords to object to a RTM claim or obstruct the process.”

Here Nicholas outlines some of the key information landlords should know before embarking with other leaseholders on the RTM route.

Who can do it

Qualifying leaseholders must hold a lease of more than 21 years in term, and two or more flats within the property must be held by these tenants.

The participating leaseholders must be those of flats comprising not less than 50% of the total number of flats, and the property itself must be a self-contained building or part of a building. 

How it starts

Leaseholders action the claim by incorporating a RTM Company which is limited by guarantee with a prescribed constitution, and the RTM Company then serves the notice on the landlord and management company.

No qualifying leaseholder can be excluded from the RTM company, and a notice of invitation to participate must be served on all of them.

Things to remember

Service of a claim notice activates a statutory timetable, and the landlord has the option to serve a counter notice (admitting or disputing the claim) by the date specified in the claim notice (not less than one month after service of the claim notice).

If the landlord fails to do this, the right will be deemed admitted.

Also, if a landlord serves a counter-notice disputing the RTM claim, the RTM Company must within two months of the counter-notice apply to the First-tier Tribunal for a determination.

The acquisition date for a RTM claim, where it is admitted and not disputed, is at least three months after the date for service of the counter-notice.

After service of the claim notice, the RTM company can serve an information notice on the landlord requiring delivery of any management information which is vital for the property’s management functions. From the acquisition date, the landlord is also entitled to become a member of the RTM Company.

More information from Blacks Solicitors.

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