July 2018
The Secretary of State for Housing, Communities and Local Government, Rt. Hon James Brokenshire MP, has tasked the Law Commission to undertake a broad review of the Right to Manage (RTM) and propose reform recommendations which improve its use in practice.
A few of the issues that hamper the exercise of RTM include:
• The existence and exercise of a landlord’s right to develop after RTM is acquired.
• RTM applies to each set of premises, and there are consequential costs and hassle involved in setting up company and serving Notices Inviting Participation on each Qualifying Tenant and each Claim Notice on the landlord if it is a multi-block estate. This has been highlighted by the Triplerose case.
• Whether supplier contracts are liable to the legal principle of frustration, and thus come to an end, on the acquisition of RTM.
• Technical points being taken on the Notice of Invitation to Participate and the Claim Notice leading to delays and costs even if objections defeated, fundamentally undermining the right. Something highlighted in the Court of Appeal judgement in in the Elim Court case. There the court said:
“I have drawn attention to the Government’s policy that the procedures should be as simple as possible to reduce the potential for challenge by an obstructive landlord. That policy has not been implemented by the current procedures which still contain traps for the unwary. This is, we were told, the third attempt by the RTM company to acquire the right to manage Elim Court. The Government may wish to consider simplifying the procedure further, or to grant the FTT a power to relieve against a failure to comply with the requirements if it is just and equitable to do so. Otherwise I fear that objections based on technical points which are of no significant consequence to the objector will continue to bedevil the acquisition of the right to manage”
The Secretary of State has now said:
“This Government is tackling unfair and abusive practices within the leasehold sector every day. Our work with the Law Commission is just one aspect of this.
“Leaseholders wanting to manage their own building should be supported to do so without the fear of uncertain, lengthy and costly court procedures.”
Law Commissioner Stephen Lewis said:
“Putting power in leaseholders’ hands can help them take control of their homes and lead to cost effective, good quality management of shared areas.
“But the law isn’t working as it should be and leaseholders are missing out on their right to manage. We’ll be looking to get to the bottom of why that is, and come up with reform recommendations that work for everyone.”
The 12-month project starts now and a public consultation on provisional proposals will be launched later in 2018.
Further information
• RTM Guide
• RTM Webinar Part 1; Part 2
• Becoming a director of a Resident Management Company
