Right to Manage

LEASE Law is able to act for landlords who have been served a right to manage notice from their flat owners.

Am I required to grant the right to manage to the flat owners?

Once instructed, we will investigate the validity of the right to manage notice that has been served on you and the entitlement of the flat owners to acquire the right to manage. If we find any discrepancies during our investigations, we will ask the flat owners’ solicitor to clarify these and will then advise you whether it is likely that the flat owners have a valid claim for the right to manage.

If the flat owners have a valid claim for the right to manage then you are required to grant the right to manage to the flat owners. If we advise you that there may be scope to challenge the claim, then you can then decide whether you wish to dispute the flat owners’ right to manage the building (if you want to retain the management of the building yourself).

What is the cost to me of the right to manage claim?

If the right to manage claim is undisputed, the flat owners are generally responsible for your reasonable costs in connection with the transfer of the right to manage the building (including preparing the responses to the information notice).

If the right to manage claim is disputed, you cannot recover any costs in connection with any Tribunal proceedings unless the Tribunal finds in your favour that the RTM company did not have the right to acquire the right to manage, but only to the extent that the costs are ‘reasonable’.

LEASE Law will recover their fees for a straightforward undisputed right to manage claim from the flat owners on a time-cost basis. If there are any costs that are not likely to be recovered from the flat owners (including if the claim is disputed), we will provide you a breakdown of these estimated costs and obtain your agreement to the estimate before proceeding to carry out the work (this includes any Tribunal work).

How long will it take to finalise the claim?

We usually estimate that an undisputed right to manage claim will take 4-6 months from the service of the initial notice to completion, however, in the right to manage claim notice, the right to manage company will set out their intended acquisition date which may be some time in the future.

What is the procedure for the right to manage claim?

The right to manage procedure is commenced when the flat owners collectively form a right to manage company and serve a formal notice on the landlord claiming the right to manage. The right to manage company must provide a deadline which is at least a month from the date of the claim notice by which the landlord must respond with their formal counter-notice. The right to manage company must also propose a date to acquire the right to manage (also known as “the acquisition date”) which is at least three months after the counter-notice deadline.

The landlord may respond in the following ways:-

  1. Admit that the right to manage company has the right to manage or not respond with a counter-notice at all. This will happen in the majority of cases, and the right to manage company will just proceed to acquire the right to manage on the acquisition date as set out in the claim notice.
  2. Dispute that the flat owners have the right to manage the building. The right to manage company can then apply to the Tribunal for a declaration that they are entitled to manage the building and the application must be made within two months of the date of the counter-notice.

Prior to the acquisition date, the right to manage company can serve an information notice on the landlord which requests certain information about the management of the building and the landlord must respond within 28 days of the notice (although this is subject to the proviso that they do not have to respond before the acquisition date).

The right to manage company will then proceed to take over the right to manage on the proposed acquisition date.

Can I have membership in the right to manage company as the landlord?

If you request membership in the right to manage company, the right to manage company is required to give you a vote for every flat that you own in the building and if you do not own any flats in the building, the right to manage company is required to give you one vote.

What happens to the service charges that the flat owners have already paid?

The landlord must transfer all service charges that have not been spent to the right to manage company on the acquisition date or as soon as after that date as is reasonably practicable. The landlord should also provide the right to manage company with a reconciliation of the services charges up to the acquisition date.

Which specific management functions and responsibilities does the right to manage company take over?

The right to manage company will take over all the management functions and responsibilities that are specified in the leases (save for a few particular functions and responsibilities outlined below that stay with the landlord). Typically, this may include the responsibility for the repair and maintenance of the building, the buildings insurance, levying and collection of service charges and the day to day management of the building.

The right to manage company also takes on the responsibility for:-

  1. Approvals of covenants – however, the right to manage company must give notice (14 or 30 days’ notice depending on the specific approval requested) to the landlord of the request for consent. If the landlord objects then the right to manage company cannot grant the consent until the landlord withdraws their objection or the matter is determined by the Tribunal.
  2. Enforcement of covenants – however, the right to manage company must keep the landlord informed of any breaches of covenant and any breaches that have not been remedied must be reported to the landlord so that they can proceed to enforce the covenant through the forfeiture provisions (if they wish to do so).

Which specific management functions and responsibilities stay with the landlord?

The landlord specifically retains:-

  1. the right to collect the ground rent; and
  2. the right to exercise forfeiture to regain possession of the flat; and
  3. the management of any non-residential parts of the building (for example, commercial units).

How can LEASE Law help me?

LEASE Law are specialist solicitors who can act on your behalf in respect of the legal requirements for transferring the right to manage to your flat owners or disputing the right to manage company’s claim (if necessary). LEASE Law will recover their fees in connection with a straightforward undisputed right to manage claim from the flat owners on a time-cost basis. If there are any costs that are not likely to be recovered from the flat owners, we will provide you a breakdown of these estimated additional costs and obtain your agreement to the estimate before proceeding to carry out the work (this includes any Tribunal work).

The work that we will carry out for you includes receiving and investigating the claim notice, investigating the freehold and leasehold titles to the subject property, preparing and serving the counter-notice (if necessary) and assisting with responses to the information notice.

If you would like LEASE Law to assist you, please send a copy of your right to manage notice or have a copy of the claim notice to hand, and contact Jade Wilson  (jade@leaselaw.co.uk or 0204 511 9100) or Joanna Botley (joanna@leaselaw.co.uk or 0204 511 9101) for a no obligation discussion.