Running a right to manage company

About running a right to manage company

This guide is for leaseholders who are taking on the role of director of a right to manage company, or who want to know more about how a right to manage company should be run.

A right to manage company is a special type of company set up by leaseholders, to take over management of their building from the freeholder (landlord) under the right to manage.

The company’s responsibilities

A right to manage company is responsible for the landlord’s management duties as set out in the lease.

These will usually include:

• the day-to-day management of the building
• repairs, redecoration and maintenance of the structure of the building and the common parts, including cyclical or seasonal maintenance
• maintenance of plant and facilities, lifts and central heating boilers
• improvements to the building (where this is included in the lease)
• services to maintain common parts of the building, such as lighting, heating, cleaning, grounds maintenance, caretaking and porterage
• warden services for retirement flats
• arranging buildings insurance
• charging and collecting service charges
• accounting
• providing information that the landlord has a legal duty to provide
• meeting all legal requirements relating to the management and fabric of the building, including building safety under the Building Safety Act 2022

The right to manage company is also responsible for:

• dealing with breaches of the lease
• granting approvals

How the company is run

The rules for how the right to manage company is run are in its articles of association.

A right to manage company must have standard articles of association, which are set out in legislation:

• in England – the schedule to the RTM Companies (Model Articles) (England) Regulations 2009
• in Wales – the schedule to the RTM Companies (Model Articles) (Wales) Regulations 2011

The articles of association cover:

• the powers of the company
• the liability of each member (limited to £1)
• the powers and responsibilities of the directors
• how directors make decisions
• how to become a member
• how meetings are organised
• voting arrangements

Codes of practice

Right to manage companies should follow a government-approved code of practice:

• the Service Charge Residential Management Code, published by the Royal Institution of Chartered Surveyors (RICS)
• the Private Retirement Housing Code of Practice, published by the Association of Retirement Housing Managers (ARHM) – for retirement housing

It’s important to comply with one of these codes. Although compliance is not mandatory, failing to follow them is one of the grounds for an application to the tribunal to appoint a new manager or to end the right to manage.

Using a managing agent or self-managing

The right to manage company can either do the day-to-day management itself, or use a managing agent.

Choosing to self-manage might work if the building is small and the directors have the experience and time to meet their obligations. Even then, it is worth considering whether using a managing agent may help.

With larger buildings, it’s usually a good idea to appoint an experienced managing agent to do the day-to-day property management.

Managing agents

A managing agent or property manager (sometimes called a block manager) is a person or company appointed to act on behalf of the right to manage board of directors to do the day-to-day management of the building. The agent or manager will usually be employed by a property management company.

There are things you should consider when choosing a managing agent:

• check they’re a member of a recognised professional body, such as the Royal Institution of Chartered Surveyors (RICS) or The Property Institute (TPI)
• check they belong to a redress scheme for handling complaints
• compare fees – these can vary, so it’s best to compare several agents
• compare the expected level of service and consider what you need for your building
• check how many other buildings they’re managing, and consider how much time they’ll have for your building

You’ll need to engage the agent under a contract called the management agreement. This will typically last for 1 year, so that you do not need to follow the Section 20 consultation process which applies to contracts lasting more than a year.

Management fees are normally paid quarterly in advance. You may need to pay extra fees for services such as:

• major works consultation under Section 20
• company secretary services
• preparing management packs
• drafting consents to sublet or for alterations

The right to manage company will need to give the managing agent instructions, and make sure they’re meeting their responsibilities, but avoid making unreasonable demands. Remember that they have a business to run and must follow certain obligations, such as legal requirements.

Find out more about using a managing agent.

Self-managing

If you decide to self-manage you will need to:

• arrange insurance of the building
• appoint contractors for the various services that the landlord has been providing to the block such as gardening, boiler maintenance, caretaking or cleaning
• organise repairs and maintenance, both on a day-to-day basis and for cyclical works such as external or internal redecoration
• manage budgets, service charges and bank accounts – you must have a client account to hold funds on trust for the leaseholders

Members and directors

Members

A right to manage company is a company limited by guarantee, which means it has members, not shareholders.

Members are the owners of the company, who make important decisions. They cannot take any profit – any extra money is kept within the company. They promise an agreed amount of money if the company cannot pay its debts, but for a right to manage company this is limited to a nominal amount of £1.

The members might be liable for other costs in some circumstances, for example the landlord’s costs if the right to manage claim is disputed.

When the right to manage is first set up, all the leaseholders in the building must be invited to become members. No one can be excluded.

You do not have to become a member, but it gives you more say over how your building is managed. You have the right to become a member at any time.

New owners who buy a leasehold flat after the right to manage has been set up can also become members. The right to manage company should make sure that an application form is included in the management pack that a seller gives to their buyer.

The company must keep an up-to-date record of members. If there are more than 50 members then this should be in the form of a spreadsheet or index.

The founding members are listed with Companies House when the right to manage company is set up, but after this the company does not have to tell Companies House about new members. However, you must tell Companies House about changes of directors or “persons with significant control”.

Directors

The directors are people appointed to run the company. A right to manage company must have 2 directors, but it can have more. The directors are not paid.

The directors make decisions about how the building should be managed. For example they might need to:

• approve a service charge budget
• decide which quote to accept for a piece of work
• propose which contractors to use
• make decisions about major works
• decide on policies for the building, such as a new refuse disposal policy

As a director, your name, age and address will be registered with Companies House and available to view by the public. You may be able to ask for your details to be kept private, but you should check this before taking on the director role if it’s a concern for you.

Directors are legally responsible for decisions the company makes. The company should arrange indemnity insurance to protect the directors, called directors’ and officers’ insurance (D&O insurance).

If there’s a breach of building safety rules, enforcement action will normally be against the right to manage company, rather than individual directors. However you might also be liable individually in certain circumstances, for example if you have been negligent or criminally complicit.

Who can be a director

Usually the directors will also be members of the company and leaseholders of flats in the building, but this is not essential. For example a managing agent or a relative of a leaseholder could be a director.

There are few requirements to be a company director. Anyone who is willing can be appointed, provided they are 16 or over and are not disqualified or bankrupt.

When setting up the right to manage, if there is already a residents’ association with active members and a committee, the committee members may be willing to be the first directors. If you do not have a formal or informal residents’ group, you will need to organise a meeting and discuss who is going to take on these roles.

If there are no directors

A company that has no directors can be closed down by Companies House (struck off the register). If all the directors resign, it’s important to find new directors to replace them.

Striking off does not happen immediately. Companies House will send a notification to the company, and will then start the process if there is no response after a few attempts.

Companies House will publish their intent to strike off company, and after this you have at least 2 months to gives reasons why it should not be struck off.

Company secretary

As well as the directors, a right to manage company can have a company secretary, but this is optional. The company secretary supports the directors and does administrative tasks.

Sometimes a managing agent acts as the company secretary. There will be a charge for this service, which you can recover through the service charge, if the lease allows this.

If there is a company secretary their details must be registered with Companies House.

Meetings, communications and decisions

Directors’ meetings

The directors will need to have regular meetings to make decisions. These are called board meetings.

A chairperson should be appointed at the start of each meeting. You’ll need to keep a record of the meetings, in the form of board minutes.

Decisions can be made unanimously or by majority vote. If a vote is tied, the chairperson of the board will usually have the casting vote.

If you are using a managing agent, they will ask for board approval for certain decisions, particularly around expenditure. Usually the agent will have an agreed spend limit previously approved by the directors, below which they do not need to ask for further board approval.

Member meetings

It is no longer compulsory for small companies to hold an annual general meeting (AGM). But it’s good practice to meet with members of the right to manage company and keep leaseholders and residents informed about what’s happening with the building.

You might also want to have additional meetings during the year, called EGMs (extra-ordinary general meetings).

If you hold an AGM or EGM you’ll need to decide whether it will be face-to-face or online using video conferencing tools such as Zoom or Microsoft Teams. If you have the technical skills you could have a hybrid meeting so people can attend either in person or via video conferencing. If you do not have communal space in the building you could hire a hall or use someone’s flat if it’s suitable.

All members have the right to attend general meetings and give their views. Members may attend meetings by proxy, where they nominate someone else to attend and represent them.

Decisions can only be made at a meeting if it is “quorate”, which means at least 20% of the members attend. This is quite a high threshold so you’ll need to make sure your membership records are up to date and encourage people to attend.

Give plenty of notice of the meeting, using flyers and emails or letters to leaseholders. Under company law, the minimum notice is 14 days. It may be longer if a different notice period is set out in the company’s articles.

You’ll need to have someone take minutes of the meeting and circulate them afterwards.

Voting

Normally each member of the right to manage company gets 1 vote per flat. If a flat is jointly owned, for example by a couple, they get 1 vote between them. The landlord also gets 1 vote if they’re a member.

There are different rules if there’s more than 1 landlord, if there’s non-residential space, or if the landlord owns flats in the building. Any landlords’ total votes are limited to one-third of the votes held by all leaseholders, so that landlords cannot outvote the leaseholders.

If you are having votes on any decisions at a meeting, you can either ask for a show of hands or have a poll where you count votes.

For most decisions, you’ll need a majority of over 50%. Some company-related matters need a 75% majority, such as company resolutions or approving unsecured debts (called debentures).

You can also invite members to vote by proxy but you’ll need to arrange for voting forms to be sent and returned.

Email and communications

If you’re a director it’s a good idea to set up a separate email account to use for right to manage business. You’re likely to get a lot of emails, such as residents reporting issues, and updates or questions from your managing agent or contractors.

You may also need to sign up for a service to manage and store documents digitally. You might also decide to have a website for the building.

If there are fees for these services you should get legal advice on whether you can recover them from the service charge.

Dealing with contractors

The right to manage company will usually need to arrange services from various contractors such as maintenance, cleaning and utilities.

If you use a managing agent, they can arrange and manage contracts and pay invoices. The board will need to give the managing agent clear instructions. If you’re self-managing you’ll need to find and negotiate with suppliers directly.

It’s best to meet potential contractors on site, and get at least 2 quotes to compare the value. Check that suppliers have appropriate insurance cover.

Make sure you review contracts regularly. If you want to change supplier, check what notice period you need to give.

Check whether you need to follow the Section 20 consultation process. You do not need to do this for contracts that last 12 months or less, such as insurance and your managing agent.

Site staff

If you have site staff such as a warden or caretaker, the right to manage company will become their employer. The company will be responsible for that employee after handover under the Transfer of Undertakings (Protection of Employment) Regulations (TUPE).

You will need to decide whether any changes to their terms and conditions are necessary and get specialist advice first.

You can find out more about TUPE on GOV.UK.

It may be easier to have staff employed through an agency rather than directly by the right to manage company, as the agency will then be the direct employer. However there will be fees for this.

If you have a managing agent, they will oversee any staff day to day.

Although it’s rare, some buildings have staff who live rent-free on site, for example in a caretaker’s flat. If the flat is owned by the landlord then you’ll need to pay rent to them for housing the staff. You’ll need to negotiate arrangements with the landlord.

Dealing with disagreements

Disagreements with directors

It can be hard to find leaseholders willing to take on the responsibility of becoming a right to manage company director. They will be volunteers and may have limited time. They may lack experience and need training to be more effective in the role.

It’s common to have disagreements among the directors or members about how the building should be managed. There may also be personality clashes between directors which can affect the management of the block.

It’s important to try to stay objective when your property and assets are affected directly by decisions. Remember why you took on the right to manage in the first place and look for common ground wherever possible.

Most disputes can be resolved amicably by effective communication. But if this fails you could ask for someone such as property manager to mediate, or get help from a paid mediator.

Find out more about alternative dispute resolution, including mediation.

Appointing and removing directors

If necessary, the directors or members can take steps to appoint or remove one or more directors, either through the articles of association or using company law procedures.

If you would like to remove a director, start by checking the articles of association. If the director has breached their obligations, the articles should show how they can be removed.

Under section 168 and 169 of the Companies Act 2006, members can remove a director by proposing a resolution which is then voted on at a general meeting. The company must give notice of the planned resolution to the director and allow them to be heard at the meeting.

In extreme cases, if the building is not being managed effectively then it’s possible to apply to the tribunal for the appointment of a manager. However, that will end the right to manage, and after the court-appointed manager’s term ends, the landlord will become responsible for managing the building.

Disagreements with a managing agent

If there are difficulties working with a managing agent, they should have a complaints procedure you can follow.

As their employer, the right to manage company also has the option of asking for a new property manager or replacing the managing agent with another firm.

Find out more about redress schemes for complaints about property management.

Service charges and accounts

The right to manage company will need to manage the building using funds from leaseholders, which will come from issuing service charge demands.

You can charge for services from the date the company takes over management. It’s important to prepare a budget and the first service charge demands before the handover date.

The landlord remains responsible for collecting any arrears from before the right to manage company took over.

Any ground rent will continue go to the landlord, not the right to manage company.

Bank accounts

The right to manage company will be responsible for collecting service charges and holding them on trust for leaseholders, in a specific bank account. This protects them in case the company becomes insolvent.

This is not a regular business account and you may need to speak to a branch manager to arrange opening one.

If you’re using a managing agent, they will have a client account already and can set you up with a service charge account for the building.

The right to manage company may also want to have its own bank account for expenditure such as set-up costs, holding meetings and administration.

Company expenditure

Expenditure for things like directors’ and officers’ insurance, administration, postage and room hire are costs that you can claim from the service charge if the company has no other income and the leases allow this.

Some right to manage companies manage consents and providing information themselves, and can charge fees for this. These funds would be income for the company which it can spend as it wants, subject to the articles of association and agreement from members.

You cannot use service charge funds to make any payments to directors, except for reimbursing their expenses from managing the building.

Plans and budgets

You’ll need to create a budget showing what you expect to spend for the year ahead. The budget should be based on the previous year’s expenditure and expected costs for the next year, with an allowance for inflation.

For larger buildings you’ll also need a planned maintenance programme. It’s best to get professional help for this.

The maintenance programme should cover at least 25 years, so that it includes all the parts of the building that need to be renewed over time.

It should include budget costs (including fees and VAT), so that both routine and irregular costs can be properly programmed to spread expenditure. This will show how much need to be collected for the reserve fund.

The service charge year and accounts cycle

The leases of the flats in the block should give details of the financial year used for that building. Often the year runs from either 1 April to 31 March, or 1 January to 31 December.

In older leases the year may run from one of the quarter days (25 March, 24 June, 29 September or 25 December). For example it could run from 25 March to 24 March the next year.

Service charge demands

The right to manage company or managing agent will need to issue service charge demands based on the budget.

Service charges are usually billed in advance in 2 equal payments, based on estimated costs for the next year. They might include a contribution to a reserve fund, which will vary depending on plans for major expenditure in the future.

Service charge demands must be in line with the terms of the lease. They must meet certain requirements to be valid.

Year end accounts and balancing charges

At the end of the financial year, the right to manage company or managing agent will need to calculate actual expenditure for the year and prepare accounts. The accounts must be prepared within 6 months of the end of the accounting year.

If the actual expenditure was more than the budget, the leaseholders will need to pay an extra amount to cover the shortfall (a balancing charge). This must be demanded within 18 months of when the costs were incurred, unless the right to manage company or agent sends a notice within 18 months telling leaseholders about the costs, called a Section 20B notice.

If the actual expenditure was less than the budget, the lease will say whether the unspent amount should be refunded to leaseholders, or credited to the service charge account.

Example service charge demand and budget

Marsham Towers is a block of 10 leasehold flats. Each flat pays a service charge contribution of 10%. The financial year runs from 1 January to 31 December.

The right to manage company has budgeted costs of £9,000 for 2025, with a total reserve fund contribution of £1,000.

The service charge for each flat is 10% of £9,000 + £1,000, which is £1,000.

This is payable in 2 equal parts: £500 on 1 January and £500 on 1 July.

Example service charge demand

Flat 1

Invoice for period 01/01/25 to 30/06/25:

Service charge on account £450

Reserve fund £50

Total £500

Example budget

Marsham Towers

Budgeted expenditure for 2025

• Management fee £2,500
• Insurance £1,000
• Cleaning £1,000
• Gardening £1,000
• General repairs £1,000
• Sundries £500
• Accounting £500
• Legal costs £500
• Gas £500
• Electricity £500

Reserve fund £1,000

Total expenditure £10,000

Example balancing charge

If the right to manage company overspends by £500 in 2025 because there was an unexpected roof leak, they will need to demand an extra £50 from each leaseholder at the end of the financial year.

More information

Introductory courses on budgets and accounting for service charges are available from The Property Institute (TPI).

Section 20 consultation for major works

Planning for major works

It’s best to collect money for a reserve or sinking fund, if the lease allows this.

A fund will allow you to spread major works expenditure over time, and will make it easier to collect the money you’ll need, without sudden increases in the service charge.

Before deciding how much to collect you’ll need to do a survey of the building and check the terms of the lease. The lease may set out timings for when regular work such as repainting should be done.

If it’s not stated in the lease, you’ll need to get advice from a surveyor about when works are needed.

A surveyor can prepare a major works or capital expenditure budget to make planning easier. This will usually be over 10 years but it can be longer or shorter.

The consultation process

Section 20 consultation is a procedure intended to protect leaseholders from paying excessive costs for major works. It gives the leaseholders notice of the landlord’s or right to manage company’s plans, and seeks their views.

The works or contract for services cannot start until the consultation process is complete, but you can issue service charge demands before, during or after the consultation, if the lease allows this.

The right to manage company will be responsible for following the correct consultation process.

The legislation is Section 20 of the Landlord and Tenant Act 1985, as amended by the Commonhold and Leasehold Reform Act 2002.

You must consult leaseholders before you either:

• carry out “qualifying works” costing any one leaseholder more than £250 (including VAT) – this covers repairs, maintenance and improvement such as roof repairs, redecoration or new flooring
• enter into a “qualifying long-term agreement” (QLTA) for the provision of services costing any one leaseholder more than £100 and lasting more than 12 months – this covers contracts for services such as boiler maintenance, cleaning and gardening

You can arrange contracts to last 12 months or less (including any notice periods) to avoid triggering the QLTA threshold. For example most management agreements with managing agents will be for 12 months.

The £250 or £100 thresholds are for the highest contributor, so in a block of mixed sized flats, this might be the largest flat if they pay the highest service charge percentage.

The thresholds apply to an individual flat, so it does not matter if someone owns more than 1 flat in the building.

These thresholds have not been revisited for over 20 years. It’s possible that the government will change the thresholds in future.

Examples: when is Section 20 consultation needed?

Stage 1: notice of intention

The first step is to serve a notice of intention on leaseholders, describing the works or services and why they are needed.

Leaseholders then have 30 days to make observations and to nominate a contractor.

You must try to get an estimate from a nominated contractor.

Stage 2: notice of estimates

At this stage you must provide at least 2 estimates for the works. One or more of the estimates must be independent of the right to manage company.

You must also summarise any observations from leaseholders made at stage 1 and respond to them. You do not have to follow any observations, but you must “have regard” to them.

Leaseholders can make observations on the estimates. If you have not provided the full estimates, they can inspect them at a suitable location, such as a managing agent’s offices.

If you do not choose the cheapest contractor or nominee, you must serve a notice of award giving your reasons for choosing the contractor.

Buildings insurance

The right to manage company will need to make sure that buildings insurance is in place at handover.

This can be difficult because there may be no service charge funds available to pay the premium. Managing agents will not want to take on liability for the potential debt if that would be in breach of their own obligations.

Leaseholders may already have paid an insurance premium through the service charge for the same year and may be unwilling to pay again.

Think about the timing of the handover, and plan ahead. Arrangements will be simpler if you can take over at the beginning of a new service charge or insurance year.

If you are not taking over the existing policy mid-term, the freeholder is free to cancel the policy. They may be entitled to a partial refund of the premium which should be returned to the service charge fund. But check the policy terms first, as the insurer may refuse to do this if there have been claims on the policy or if it is for specialist cover such as terrorism.

What needs to be insured?

You may need:

• a buildings insurance policy – this covers the building and grounds from risks such as fire, escapes of water, storm and subsidence, and is also likely to cover occupiers’ liability, and employer’s liability if the company employs staff
• a terrorism policy – this is a specialist policy to cover explosion or terrorist activity that might damage the building
• an engineering policy (sometimes known as a plant protection policy) – if you have lifts, boilers or plant rooms

Contents of flats are the responsibility of individual occupiers, whether tenants or leaseholders. Buy-to-let owners will likely want their own landlord insurance policy.

You should also take out directors’ and officers’ insurance to protect the directors.

Arranging cover and cost

Larger landlords (freeholders) will usually have a block insurance policy covering several properties in their portfolio. This means they have better bargaining power and are lower risk because of the number of properties covered.

A right to manage company with a single building will not have the same advantage and you may be quoted a much higher premium. There may be ways to reduce the premium, for example:

• your managing agent may be able to arrange a block policy for properties they manage
• you can agree a higher excess for claims such as escape of water to reduce the premium
• you may be able to take over the landlord’s previous policy if the insurer agrees – this may be particularly useful if you are taking over mid-year as it avoids paying an extra premium in the same year

You can use your rights to get information from the landlord to help with arranging buildings insurance.

Water leaks

Water leaks are by far the most common claim on buildings insurance for blocks of flats. Showers, baths, pipework, radiators and washing machines are the main sources of leak claims.

Most comprehensive buildings insurance policies will include cover for leaks between or within flats. The claim history of the building will affect the premium so it’s important to be aware of this risk and reduce it as much as possible, for example by educating tenants and leaseholders about maintenance.

If you have a roof, particularly a flat roof, you may also need to deal with claims of water leaks from rain. It’s important to maintain the roof to reduce claims.

Insurance claims can take several months to settle. There is likely to be an excess on the policy, which could range from £500 to £2,500 or more. You’ll need to check liability and if the excess should be paid by a particular leaseholder who is responsible for the leak, or covered by the general service charge fund. You’ll need to check the lease terms to see how insurance claims should be managed.

Emergencies and out of hours calls

You’ll need to plan for what to do if disasters happen, especially on weekends, at night and on bank holidays when no site staff or property managers are available. You need to decide if you (as directors) are going to be the emergency contact or whether to use a service for this.

For a small block it may be enough to have a 24 hour plumber, locksmith and glazer on the books. For a larger block the managing agent should arrange 24 hour cover, or you could make arrangements with a supplier yourself.

Serious leaks that endanger life can be dealt with by the fire brigade in an emergency, for example if they could damage electrical or gas installations and cause a fire or gas leak.

Dealing with breaches of the lease

The right to manage company will be responsible for dealing with any breaches of lease by leaseholders in the building, such as non-payment of service charges or unauthorised uses or alterations to a flat.

The leaseholders’ covenants, or obligations, under the lease become the responsibility of the right to manage company. The company must make sure that all covenants are complied with, take steps to put right (remedy) any breaches, and keep the landlord informed.

You must report any breaches that have not been remedied to the landlord, unless they have specifically told the right to manage company that it does not need to do this.

The landlord can enforce the covenant through a process of ending the lease (forfeiture). The right to manage company cannot start forfeiture proceedings itself, as this power stays with the landlord.

If the lease gives the landlord a right to get access to the flats for the purposes of compliance or enforcement of covenants, this right is available to the right to manage company.

Dealing with service charge arrears

Late payment or non-payment of service charges is a serious issue and a breach of the lease. If you do not collect all the funds you need to manage the building, this will quickly lead to problems as you will not have enough to pay for services. It’s important to be firm but fair with the leaseholders about payment.

Credit control policy

If you use a managing agent, they should have a credit control policy that can be used after an appropriate time, such as 30 days after a service charge demand if it’s not yet paid.

If you’re self-managing then you’ll need your own credit control policy.

The lease may allow you to recover enforcement costs such as administration costs, legal costs and interest for late payment as an administration charge.

If the lease does not allow this, you may be able to apply to the tribunal for a change to the lease (under Section 35 of the Landlord and Tenant Act 1987), to introduce or strengthen your enforcement powers.

Taking legal action

If bills are still unpaid after following the credit control policy, you might need to take legal action for recovery. Before doing this, it’s important to make sure you have served the demand for service charges correctly and in line with the lease.

Most debt recovery solicitors will operate on a “no fee” basis and charge their costs directly to the leaseholder. You can find a firm through industry magazines such as Flat Living or News on the Block.

The right to manage company cannot take steps to end a lease for arrears. If it’s not possible to recover arrears through other means, then you’ll need to ask the landlord (freeholder) to use their powers.

Granting approvals

Most leases require the leaseholder to get consent from the landlord for certain things, such as subletting, assigning the lease to a new leaseholder when they sell their flat, and making certain changes (alterations) to their flat.

The power to issue these approvals passes to the right to manage company, although you must keep the landlord informed.

Before granting any approval, you must give notice to the landlord. You must give 30 days’ notice for approvals relating to:

• assignment
• subletting
• placing a charge on the property
• parting with possession
• making structural alterations or improvements
• changing the use of the property

For all other approvals you must give 14 days’ notice.

You do not need the landlord’s specific consent. If they do not object, you can grant the approval.

You can charge for granting approval, to cover any costs.

If the landlord wants to object, they must do so by giving notice to the right to manage company and to the leaseholder (and for subletting, to the sub-tenant).

If the landlord objects, you cannot grant consent until they withdraw their objection, or the matter is decided by a tribunal.

The landlord, right to manage company or leaseholder can apply to the tribunal for a decision about approvals. You apply by submitting a form:

• in England – application form Leasehold 8
• in Wales – application form LVT1

Subletting and Airbnb

Whether leaseholders are allowed to rent out (sublet) their flats or use services such as Airbnb will depend on the terms of their lease.

The lease may prohibit or restrict subletting. It might say that only a single family or household can occupy the flat. This would prevent a flat from being used as a house in multiple occupation (HMO) for example.

Most leases will allow subletting of the whole of a flat on an assured shorthold tenancy, although the leaseholder might need consent first. The tenant may even be required to enter into a covenant not to breach the terms of their landlord’s lease.

Subletting of part of a flat is rarely allowed. Letting a room to a lodger is not classed as subletting, but it might breach a restriction that says the flat must be occupied by a single family or household.

Make sure you get the details of the tenant and any letting agent. The right to manage company is entitled to know who is occupying the building. The leaseholder is required to disclose this and cannot refuse based on GDPR, although you’ll need to make sure you comply with GDPR rules for holding and protecting personal data.

You will also need to register with the Information Commissioner’s Office (ICO) as a data controller, and pay an annual fee.

Find out more from the ICO about your role in processing personal data.

Consent for alterations

The lease will say whether leaseholders have the right to make alterations to their flats and whether they need the landlord’s consent. The right to manage company will be responsible for granting or refusing consent.

If you decide to give consent for an alteration, you’ll need to do this by a licence or deed. You can charge a fee for any costs, such as a solicitor or surveyor. Ask for the fee to be paid up front, as a condition for granting consent.

You will need to notify the freeholder before giving consent, and allow them 30 days to object. After 30 days, if they have not objected then you are free to grant consent. The freeholder cannot charge a fee for considering the request.

The following changes are unlikely to be considered alterations that need consent:

• general DIY – but check timings for building work with the council, and check any rules in the lease about noise
• drilling holes in walls to put up pictures or cupboards (this will not count as “cutting, maiming or injuring” a wall under the lease)
• replacing kitchen or bathroom fittings like-for-like, if no extra holes need to be made in outside walls
• new carpets

The following types of work might need consent, and will need to be investigated:

• new windows and double glazing, as these change the external appearance and will usually need consent if they’re replaced – check the lease to see who is responsible for the windows, and check that plans and materials are suitable for the style of the building and comply with local planning and building regulations
• removing internal walls, for example to create an open-plan kitchen/diner – check with a surveyor whether the walls are structural
• remodelling a flat to move a kitchen, bathroom or bedroom – this can create noise that affects neighbouring flats
• new flues or pipework that comes out through the walls of the flat, such as soil pipes, boiler flues or bathroom vents
• hard flooring such as wooden flooring – many leases have a carpet clause that restricts the type of floor covering leaseholders can fit, to reduce noise

Buying the freehold

After taking on the right to manage, you might want to consider buying the freehold of the building. This will give the leaseholders full control.

If the right to manage is working well, you’ll be in touch with all the leaseholders and will have a good understanding about the block and its value. This can put you in a good position to buy the freehold.

However it can be a long and expensive process. You’ll need help from a surveyor and solicitor.

If you go ahead, the building will no longer be run through the right to manage, so you’ll need to consider the best way to hold the freehold and manage the building.

You should also consider future changes in the law which might make it easier and cheaper to buy the freehold.

Find out more about buying the freehold.

Getting help with the right to manage

If you take on the role of director of a right to manage company it’s important to get support, training and advice.

Where to get advice

The Leasehold Advisory Service can give free initial advice on leasehold, including the right to manage, Section 20 consultation, service charges and breaches of the lease.

Contact the Leasehold Advisory Service.

You can also get legal advice from a solicitor.

Training

We provide free interactive online courses for right to manage directors through Lease Learn.

The Property Institute (TPI) also has a range of courses, from introductory to advanced levels, including an introduction to residential property management. Fees vary depending on the type of course.

Some solicitors’ firms and barristers’ chambers provide legal updates, industry conferences and training on the legal aspects of leasehold property.

Emotional support

Being a right to manage director can be stressful and time consuming, and can affect you emotionally. It can be particularly difficult if you live in the block that you’re helping to manage.

You may have to deal with disagreements and disputes with other directors or leaseholders, or with contractors or managing agents. It can be difficult to manage personal relationships with neighbours while trying to make decisions that benefit the block as a whole.

There are things you can do to help:

• ask the other members and directors for help – discuss responsibilities and make sure the work is shared so that you’re not overloaded
• get help from your managing agent, and make sure they’re doing their role effectively – they are there to support the right to manage company
• speak to a solicitor if you need advice about legal issues
• think about ways to protect yourself and switch off, such as hobbies and spending time with family and friends
• find out about support with mental health on the NHS website if you need it