By Nicholas Kissen, Senior Legal Adviser
This article originally appeared in Inside Housing in December 2011 and was updated in September 2021.
Under the Commonhold and Leasehold Reform Act 2002(“the 2002 Act”), qualifying tenants of buildings containing flats were given the right to take away the management functions of the landlord without having to prove incompetence or pay any premium to achieve this.
This process is called right to manage and applies to registered providers (housing associations) and private landlords. Local housing authorities are exempt, so a stock transfer to a registered provider could well bestow on their leaseholders a right to take over the running of the building.
For RTM to succeed:
- there must be a building or part of a building that is self-contained and includes at least two flats;
- at least two-thirds of the flats must be held by qualifying tenants; primarily those with leases longer than 21 years;
- an RTM company is formed and invites non-members to join;
- once membership comprises 50 percent of flats, a formal claim notice can then be served upon the landlord;
- four months later, provided no opposing counter-notice is served, the RTM company takes over management. This is called the acquisition date.
The 2002 Act provides that only the owners of shared ownership leases who have a full 100% share of the lease can take part in right to manage.
However, in view of the decision of the Upper Tribunal (Lands Chamber) in the case of Corscombe Close, Block 8 RTM Company Limited v. Roseleb Limited the owner of a shared ownership lease originally granted for a term exceeding 21 years but whose percentage is less than 100 percent, should be able to participate.
Further information:
