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Right to Manage – freeholder’s fees

John M owns a flat in a block in Swindon. He was applying for the Right to Manage, with the other residents, in order to take over the management of the building.

Mr M sent the RTM claim to the freeholder’s address, but the claim was rejected by the freeholder’s solicitor. The freehold had been transferred to another company, so the RTM claim to the previous freeholder was invalid. The company, the new freeholder, had a registered address that was the same as that of the previous freeholder. Not only was the claim rejected, but the solicitor charged a fee of £1,000 for dealing with the claim.

The LEASE adviser explained that Section 88 (1) of the Commonhold and Leasehold Reform Act 2002 sets out the obligations of a RTM company for ‘reasonable costs’ incurred by the parties on whom the claim notice is served. This can include a freeholder, or a manager appointed to the premises, but it does NOT include a previous freeholder. Therefore there would not be any liability to pay the ‘costs’.

Mr M said, “when we informed the freeholder’s solicitor they relented”.

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