Running a right to manage company
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.
- Last updated:
- 16 December 2025
- Next review:
- 16 December 2027
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