right-to-manage
📖 What is right-to-manage? Meaning and definition
The Right to Manage is a legal entitlement for leaseholders to acquire the management functions of their residential property. This means that a company formed by the leaseholders, often referred to as an RTM company, can take responsibility for services, repairs, maintenance, and insurance of the building. The process is governed by specific legal requirements, primarily under the Commonhold and Leasehold Reform Act 2002.
When leaseholders successfully claim the Right to Manage, the First-tier Tribunal (Property Chamber) may be involved in resolving disputes, such as determining whether the statutory requirements for claiming the right have been met. The Tribunal can also rule on related financial matters, like the payment of uncommitted service charges that should be transferred to the RTM company upon acquisition of management.
For leaseholders, acquiring the Right to Manage can provide greater control over how their building is managed, potentially leading to improved services and better value for money. It shifts the responsibility for day-to-day management from the landlord to the leaseholders' own company, which then makes decisions regarding the property's upkeep and finances.
Cases often involve the Tribunal determining if the applicant company has complied with the necessary statutory steps, such as serving a 'Notice to Claim a Right to Acquire the Right to Manage' or issuing a copy of the 'Claim Notice' to all qualifying tenants. If these requirements are met, the Tribunal can rule in favour of the RTM claim, even if the landlord initially denied it.
📋 Requirements
- The applicant must comply with the statutory requirement to serve a 'Notice to Claim a Right to Acquire the Right to Manage'.
- A copy of the 'Claim Notice' must be issued to each qualifying tenant of a flat in the premises on the relevant date.
- The application may relate to a denial of the Right to Manage by the existing landlord or management company.
📝 Procedure
- An applicant company serves a 'Notice to Claim a Right to Acquire the Right to Manage' as required by law.
- A copy of the 'Claim Notice' is issued to all qualifying tenants in the building.
- If the Right to Manage is denied, an application can be made to the First-tier Tribunal (Property Chamber).
- The Tribunal determines if the applicant has complied with all statutory requirements of the Commonhold and Leasehold Reform Act 2002.
- Upon successful acquisition, the Tribunal may determine the payment of uncommitted service charges to the RTM company.
💡 Examples
- A group of leaseholders formed a company and successfully applied to the First-tier Tribunal after their landlord denied their claim to acquire the Right to Manage their block of flats.
- The Tribunal determined that an RTM company was entitled to £23,487.51 in accrued uncommitted service charges from the previous management, following their acquisition of the Right to Manage.
- A Tribunal ruled that an applicant company had correctly served all necessary notices to claim the Right to Manage, despite the respondent's challenge.
- Leaseholders at a property successfully acquired the Right to Manage, allowing them to take control of the building's maintenance and service contracts.
📚 Legal basis
- Commonhold and Leasehold Reform Act 2002
❓ Frequently asked questions
What does 'Right to Manage' mean for leaseholders?
It means leaseholders can collectively take over the management of their building, including services, repairs, and insurance, through a company they form, without needing the landlord's consent or proving mismanagement.
Do we need the landlord's permission to get the Right to Manage?
No, the Right to Manage is a statutory right, meaning you don't need the landlord's permission. However, you must follow specific legal procedures, and if the landlord denies the claim, a Tribunal may need to intervene.
What happens if our Right to Manage claim is denied?
If your claim is denied, you can apply to the First-tier Tribunal (Property Chamber). The Tribunal will assess whether your application complied with all the statutory requirements, such as serving the correct notices.
What are 'uncommitted service charges' in the context of Right to Manage?
These are service charges collected by the previous management that have not yet been spent on services or works. Upon acquiring the Right to Manage, the Tribunal can determine the amount of these funds that should be transferred to the new RTM company.
Which law governs the Right to Manage?
The Right to Manage is primarily governed by the Commonhold and Leasehold Reform Act 2002, which sets out the detailed requirements and procedures for leaseholders to acquire this right.
What is the role of the First-tier Tribunal in a Right to Manage case?
The Tribunal's role is to determine if the applicant has met all statutory requirements for claiming the Right to Manage and to resolve any disputes, such as a denial of the right or the transfer of uncommitted service charges.