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.

The Leasehold Advisory Service has produced the ‘Right to Manage’ leaflet which contains detailed guidance on the scheme.

[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

• Commonhold and Leasehold Reform Act 2002.
• Leasehold Advisory Service.
• Right to Manage.