Right to manage for leaseholders
The Commonhold and Leasehold Reform Act 2002 introduced the ability for leaseholders to transfer the management of flats from the landlord to a right to manage company, set up by the leaseholders. The ownership of the building remains with the landlord.
For leaseholders to take over management of their property, the property must have the following qualifying features:
- Only flats (not houses) qualify.
- At least two-thirds of the flats in the building must be leasehold with a lease of at least 21 years when granted.
- The building must be predominantly (at least 75%) residential.
- If there are less than four flats in the block, the landlord must live elsewhere unless the flats are purpose-built, rather than conversions.
- At least half of the flats in the building must become members of the right to manage company.
It is not necessary for leaseholders to obtain the landlord’s permission in order to transfer the management and it is not necessary for there to have been any problems with the way the property was managed by the landlord.
To exercise the right to manage, a formal notice needs to be served on the landlord. The management will then transfer to the right to manage company. The landlord is eligible to become a member of the right to manage company.
It is possible for the landlord to dispute the application by serving a counter-notice to the right to manage company. This must outline the details of why the landlord does not think the company is entitled to management. This can include:
- The building does not qualify.
- The right to manage company is not legally compliant.
- The right to manage company is comprises less than half the flats in the building.
The right to manage company will be responsible for:
- Collecting and managing the service charge.
- Maintenance of the communal areas including hallways and stairwells.
- Upkeep of the actual building, for example the roof.
- Managing complaints about the property.
- Decision-making for budgets
- Standards of management
- The overall functioning of the building.
It is not possible for the right to manage company to stop maintaining the building as a way of saving money.
 Related articles on Designing Buildings Wiki.
- Break clauses in leases.
- Community right to bid.
- Community right to build.
- Community right to challenge.
- Community right to reclaim land.
- Flat definition.
- Lease Negotiations - Tenants Checklist.
- Leasehold enfranchisement.
- Localism act.
- Rent review.
- Rent-free period.
- Right to build.
- Right to contest.
 External references
Featured articles and news
This article explains the Buildings Regulations completion certificate, what it is, and when its needed.
Graphene has many potential applications, but when will it start being used in civil engineering?
Increasing productivity – now more than ever as we lead up to Brexit – should be the sector’s number one priority in 2018.
Carillion's collapse causes Construction Leadership Council to delay the construction sector deal report.
Urban Heritage, Development and Sustainability: international frameworks, national and local guidance.
What will the General Data Protection Regulations (GDPR) mean for you when they come into force in May?
Business Secretary chairs a new taskforce to monitor and advise on mitigating the impacts of Carillion’s liquidation.
Sir John Armitt is appointed the new chair of the National Infrastructure Commission.
High quality and high density homes - is it what we need or is it storing up trouble?
Government announces its intention to strengthen planning rules to protect music venues and neighbours.
National Audit Office reports that there is little evidence that PFI offers better value than other forms of contracting.
What is liquidation and how does it apply to contractors in the construction industry?