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Considering Right To Manage?

If you’re a leaseholder in the first stages of considering forming a Right To Manage (RTM) company, here we've put together information to help you decide whether to proceed.

What is Right To Manage?

Right To Manage (RTM) is a legal exercise available to leaseholders that allows them to obtain the right to manage the common parts of their building, via a newly formed Right To Manage company controlled by the leaseholders. You may wish to take control over the care of your building and the service charges being paid. That is a right provided to you in law (subject to qualifying conditions). RTM is an exercise that we can assist you with and is a common enquiry that we receive.

What are the benefits?

You may not have a choice of managing agent for your building as these appointments are dealt with by the landlord. Having the right to manage gives you back control over such an appointment and a direct relationship with the agent could provide a greater opportunity to work together to achieve the goals for the building that you want to achieve.  

You may not be happy with the contractors used to maintain your building that has been appointed by your landlord or existing agent. Taking control over these appointments or working with an agent such as us to re-tender on your behalf provides an opportunity to improve service and to potentially reduce your service charge.

Are there any catches?

The directors of the RTM company will be responsible for the management of your building and this can be an onerous undertaking, with accountability for lots of areas of potential concern, as well as control over the finances, fire safety etc. There may be some frustrations to be dealt with amongst leaseholders and funds may be short until a suitable budget and plan for any deficits can be put in place. Ensuring that the leaseholders have considered who will govern the building - and considering whether this can be done competently - is an important first step.

You may also find that you may not be able to reduce service charges or improve service levels to the level you expect once you find out what is involved in managing the building appropriately. And you may also be constrained by the provisions of the lease in terms of what can be changed in relation to any services or management.

While working alongside a good managing agent will not remove any accountability, it can certainly relieve the workload and strain and help you to achieve the best possible outcome by getting the experience and knowledge that you need.

What do we need to qualify?

There are a range of criteria to apply depending on the circumstances of your building and the leaseholders. We should also point out that the government has promised reform to simplify the process, though this has not yet made its way through Parliament (correct as of December 2020). In general terms, in order to qualify, a block of apartments must:

  • Be a self-contained building or part of a building for each RTM claim;
  • Contain 2 or more apartments held by qualifying leaseholders (generally those leaseholders with lease terms of at least 21 years remaining); and
  • Contain not less than two-thirds of apartments with qualifying leaseholders, out of the total number of apartments in the building.

Beyond this, there are questions to answer such as whether sufficient support from the leaseholders can be obtained to carry out the RTM, how the RTM exercise will be funded and not least, how will the building be managed day to day and governed once the RTM has been obtained.

What do we do next?

 Contact us to discuss:

  • Whether we believe you may qualify for RTM;
  • What your particular concerns are in relation to the management of the building and whether we could assist, post RTM, to help you to achieve a better result;
  • An outline of the costs involved and how these can be funded; and
  • How we can help you to move the exercise forward, together with legal advisers that we could recommend.