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FAQs on Right to Manage

14 questions
I am the leaseholder of a flat. Can I and the other leaseholders exercise the right to manage (RTM)?

The building must meet certain conditions and a minimum number of leaseholders are required to take part.

  • the building must be self-contained (or if part of another building, be capable of being redeveloped independently);
  • it must include at least two flats;
  • at least two-thirds of the flats must be let to ‘qualifying tenants’;
  • it can be part-commercial but the non-residential part must not exceed 25% of the total floor area.

It will not be possible to exercise RTM if the landlord is a housing authority (such as most local authorities) nor where the resident landlord exemption applies.

If the building qualifies, at the time the Claim Notice is served membership of the RTM company should comprise the qualifying tenants of at least half of the flats in the building.

You are likely to require the services of a solicitor and a managing agent.


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Am I a qualifying tenant for the purpose of right to manage (RTM)?

A qualifying tenant is a leaseholder whose lease was originally granted for an original term of more than 21 years. There is no requirement for any past or present residence in the flats, nor any limit on the number of flats which can be owned by one person.

You are likely to require the services of a solicitor and a managing agent.


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We have taken over the right to manage (RTM), but the landlord insists that they continue to insure the building. Is this correct?

No. Your RTM company has taken over the management functions of the landlord (and any management company that might have been in place). The management functions include the insurance of the building. However the Commonhold and Leasehold Reform Act 2002 specifically provides that the landlord is entitled to arrange additional insurance at their own expense.

You are likely to require the services of a solicitor and a managing agent.


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Can I ask the landlord to provide the names of the other leaseholders so that I can invite them to participate in the right to manage (RTM) process?

It is only the RTM company that can insist on the landlord providing the names of the other leaseholders for this purpose. This is problematic because you will be unable to exercise the right to manage if you do not have sufficient numbers of qualifying leaseholders interested in taking part. We suggest that you try to get this information from the occupiers of the flats or from the Land Registry.

You are likely to require the services of a solicitor and a managing agent.


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We want to exercise the right to manage (RTM), how do we start the process?
  • You will need to form an RTM company.
  • The RTM company must serve a Notice Inviting Participation on all qualifying leaseholders who are not already members of the RTM company.
  • The RTM company then serves a Claim Notice on:-
    • any landlord in the building – ie the freeholder and any intermediate landlord
    • any party to a lease other than as landlord and tenant -eg a management company named in a lease
    • a manager (if there is one) appointed by the Tribunal.

A copy of the Claim Notice must be served on every qualifying tenant.

You are likely to require the services of a solicitor and a managing agent.


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If we exercise the right to manage (RTM), do we have to manage the building ourselves?

The RTM company does not have to carry out the actual management itself. You can appoint a managing agent to manage the building on your behalf.


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I live in a leasehold house on an estate comprising both houses and flats. Can we exercise the right to manage (RTM)?

The right to manage applies to flats only and not houses.

If your estate comprises houses and flats, as the law currently stands, the right to manage applies to each individual building with flats.

There have been proposals to change the law so that the right to manage applies to houses as well as flats. These proposals have not become law yet.

You are likely to require the services of a solicitor and a managing agent.


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The landlord is not providing information required under the right to manage. How can we force him to disclose the information?

Leaseholders who want to set up a right to manage, are legally entitled to ask the landlord to provide information they need to set up and exercise the right to manage.

If the landlord declines to provide the information it is required to give in response to a request, you can serve a Default Notice which gives the landlord a further 14 days to comply.

Failing that you can then bring an application for compliance in your local County Court.

Although this does not appear to be a very practical remedy, the Court might make a Costs Order against the landlord as well as granting the Order requested.

You are likely to require the services of a solicitor and a managing agent.


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Can the leaseholders exercise the right to manage (RTM) if the landlord lives in the building?

RTM does not apply where the premises fall within the resident landlord exemption. To fulfil this exemption –

  • The premises must not be a purpose-built block of flats AND
  • There must be no more than four flats AND
  • One of the flats must have been occupied by the landlord or an adult member of their family as their only or principal home for the last twelve months.

You are likely to require the services of a solicitor and a managing agent.


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We want to exercise the right to manage (RTM). Do we need to set up a company?

Yes. Right to Manage (RTM) has to be exercised through a special type of company called an RTM company. It is a company limited by guarantee (not shares). Its Articles of Association have to be in a specified format.

You are likely to require the services of a solicitor and a managing agent.

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Is the landlord entitled to join the right to manage (RTM) company?

Yes, the landlord is entitled to become a member of the RTM company from the acquisition date.


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Is the right to manage (RTM) company responsible for chasing service charge arrears from before it took over management of the building?

No. From the date it acquires management responsibilities the RTM company becomes entitled to demand service charges. The landlord will therefore remain responsible to collect the arrears unless the RTM company has otherwise agreed with the landlord to act as the landlord’s agent to collect them on behalf of the landlord.

You are likely to require the services of a solicitor and a managing agent.


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How can I resolve a dispute concerning Right to Manage (RTM)?

The First-tier Tribunal (Property Chamber) has the power to resolve various disputes relating to RTM including;

  1. That on the relevant date the RTM Company was entitled to acquire RTM
  2. Any question in relation to the amount of the landlords costs payable by the RTM Company
  3. A determination of the amount of service charges to be paid over to the RTM Company.
  4. Application for a determination regarding grant of an approval under a lease.

You may require the services of a solicitor.


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Is the right to manage (RTM) company bound to carry on with existing contracts entered into by the landlord?

It is considered that the RTM process may well frustrate existing contracts, that is to say, the takeover of management responsibilities by the RTM company will bring to an automatic end all existing contracts. The RTM company can then choose whether or not to continue with the contracts.

You are likely to require the services of a solicitor and a managing agent.


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