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 can apply to the Leasehold Valuation Tribunal within 2 months of the counter-notice and the tribunal will then decide if the company can manage 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.
[edit] Find out more
[edit] Related articles on Designing Buildings Wiki.
- Break clauses in leases.
- Commonhold.
- Community right to bid.
- Community right to build.
- Community right to challenge.
- Community right to reclaim land.
- Flat definition.
- Freehold.
- Lease Negotiations - Tenants Checklist.
- Leasehold.
- Leasehold enfranchisement.
- Localism act.
- Rent review.
- Rent-free period.
- Right to build.
- Right to contest.
[edit] External references
Featured articles and news
Stress Awareness Day and legal duties for employers
Calling employers to follow the five Rs this week.
Key points and relevance to construction of meeting, due to reconvene.
Cladding remediation programmes, transparency and target date.
National Audit Office issue report on cladding remediation.
HBPT and BEAMS Jubilees. Book review.
Does the first Labour budget deliver for the built environment?
What does the UK Budget mean for electrical contractors?
Mixed response as business pays, are there silver linings?
A brownfield housing boost for Liverpool
A 56 million investment from Homes England now approved.
Fostering a future-ready workforce through collaboration
Collaborative Futures: Competence, Capability and Capacity, published and available for download.
Considerate Constructors Scheme acquires Building A Safer Future
Acquisition defines a new era for safety in construction.
AT Awards evening 2024; the winners and finalists
Recognising professionals with outstanding achievements.
Reactions to the Autumn Budget announcement
And key elements of the quoted budget to rebuild Britain.
Chancellor of the Exchequer delivers Budget
Repairing, fixing, rebuilding, protecting and strengthening.
Connecting conservation research and practice with IHBC
State of the art heritage research & practice and guidance.
Innovative Silica Safety Toolkit
Receives funding boost in memory of construction visionary.
Gentle density and the current context of planning changes
How should designers deliver it now as it appears in NPPF.
Sustainable Futures. Redefining Retrofit for Net Zero Living
More speakers confirmed for BSRIA Briefing 2024.