Claim Your Right to Self Manage

To get the ball rolling, send a letter to your fellow leaseholders in the block announcing your intention to form an RTM company and what the benefits will be. Where the block is large or may have separate or attached blocks it maybe difficult to obtain everyone’s names. In this situation it is possible to serve an information notice on the freeholder or managing agent to get a list of names or buy them from a land registry.

As long as two thirds of the block are held on long leases and fifty per cent or more of the block want to participate you can form a RTM company. This is a simple process that requires the co-operation of just two leaseholders to become officers. You are legally required under the 2002 Act to set the RTM company up before application as this is the only way to exercise the right to manage. A RTM Company is a properly constituted legal company in which those participating leaseholders become members. Use a specialist company formation agent to set up the company rather than buying a ‘off the shelf company’ because the constitution must follow specific requirements laid down in the 2002 Act.

Once you have formed your RTM company the next step is to serve the Notice Inviting Participation to every qualifying leaseholder who has not already joined the company. To do this you will need to know whom each flat is registered to as every qualifying tenant is entitled to join the company. Remember, a flat could be owned by one person, everyone in the flat, a trust or a company. You also have a legal obligation to invite the Freeholder to become a member of your ‘Right to Manage’ company.

Under Section 79 of the Commonhold and Leasehold Reform Act 2002, the claim notice informing your landlord of your intentions can only be served 14 days after the Notice Inviting Participation and only if 50% of qualifying leaseholders in the block have become members of the RTM Company.

The claim notice must be sent to the landlord, any third parties such as an appointed managing agent and all qualifying leaseholders in the block. The claim notice must contain the date by which you require the landlord (or other recipients) to respond – allowing no less than 28 days to consider the claim. It is advisable to seek professional help before serving your notice to claim as an invalid notice may result in having to start afresh. If none of the relevant parties disputes the claim, then the likely acquisition date for the Right to Manage is a further four months after the issue date of the claim notice.

Having received the claim notice the landlord has the following options;
• No response/no action
• Issue a counter-notice disputing the claim to RTM
• Issue a counter-notice accepting the claim to RTM

To dispute the claim the landlord must prove that the application for RTM does not comply with the 2002 Act and respond within the period specified in the notice. There are limited grounds that a landlord can use to object to your right, the most commonly sighted are:

• Two thirds of the flats are not sold on long leases
• Participation notices have not been served on all relevant parties
• The building does not comprise self-contained flats
• There are non-residential parts of the building that exceed twenty five percent

If the RTM Company receives a counter-notice from the landlord it is advisable to adjust the initial claim notice. In situations where the counter-notice disputes the claim and the RTM Company remains convinced of its entitlement than the matter must be resolved by the Leaseholder Valuation Tribunal (LVT). The RTM Company must apply to the LVT within two months of the counter-notice or the claim to RTM will be invalid.

Assuming the landlord cannot find any legal reason that invalidates your claim you are close to acquiring your Right to Manage. However, before you gain control it is prudent to obtain as much information about the building as possible and to start thinking about who is going to undertake the management of the block. If self-managing the block isn’t possible at first then appointing a managing agent could provide a short-term solution.

It is the responsibility of the landlord to inform any contractors providing services to the block that the right to manage is being exercised and pass their details onto the RTM. The landlord must also settle any outstanding bills and give the RTM Company a clear picture of the block’s accounts with any service charge revenue transferred to the RTM Company on the acquisition date.

The right to manage can normally be acquired four months from the service of the claim notice. From the date of acquisition the RTM company takes over the landlords responsibilities for the maintenance, repair, collecting service charges and accounting, insurance and the overall management of the block. There are many benefits to claiming your right to manage as it gives leaseholders more control over their service charges and more say in the management of their block.

For more information visit: www.leaseholdersupport.co.uk