What is the Right to Manage?
The Commonhold and Leasehold Reform Act 2002 provides the right for leaseholders to take on the landlord’s management functions. This involves the leaseholders setting up a Right to Manage (RTM) company, then the landlord’s management would transfer to the RTM company.
An RTM company doesn’t have to manage the building directly; it can pay a managing agent to do it. The Leasehold Advisory Service (also known as Lease) has published guidance on how to set up an RTM company, which you can find on their website.
The good news is that we’ve worked with Right to Manage companies before – so if this is something you’re considering, please call us on 0800 014 15 45 and ask for the Home Ownership team.
How would I start an RTM?
If you want to set up an RTM you don’t need to prove any mismanagement by Soha, or get a court order. The RTM company and the building must simply meet the following criteria:
To qualify for the Right to Manage:
· The building must be made up of flats (houses don’t qualify)
· At least two-thirds of the flats in the building must be leasehold, with leases that were for more than 21 years when they were granted
· At least 50% of the building must be residential. A Right to Manage exists provided no more than 50% of a building’s total floorspace, excluding common parts, is in non-residential use.
· The number of members the RTM company has must be equal to at least half of the total number of flats in the building
A building will not qualify for Right to Manage if these three conditions apply:
· It was converted to residential use rather than being purpose built AND
· It contains four flats or fewer AND
· One of the flats is the main home of the freeholder or an adult member of their family