If you are considering buying the freehold of the building in which you have a leasehold flat but there are not sufficient numbers of flat owners in your block of apartments who are also interested in buying the freehold…what now?
The Right to Manage (RTM) your block is a useful option available to flat owners who can’t afford to buy their freehold and is quickly becoming a popular alternative to a freehold purchase.
This means that for a zero purchase price, you can take over the management obligations of the Freeholder. Your Right to Manage Company will then be in charge of insuring the building and the day to day management and maintenance. This means the participating flat owners gain control of their service charge bills.
If you reside in a block of apartments, and are not satisfied with the service and cost, the Commonhold and Leasehold Reform Act 2002 allows you to get rid of your existing managers without having to prove incompetence.There are three conditions: a minimum half of the apartment owners must want to take this action; a minimum of 75% of the building must be residential; and not less than two-thirds of the flat owners must have long leases.The right to manage is carried out by the company, not by the individual leaseholders, and so cannot be put into practice without the formation of the company. It is the company which obtains the right to manage and which then assumes responsibility for the management; the individual leaseholders may change over time, but the company remains in place. Please click here for more detailed information.
The RTM company needs to have an Articles of Association which govern the purpose and running of the company. The Articles are prescribed by law and a company will not be a valid RTM company for the purposes of the Act if it does not match these provisions.From the date of incorporation of the RTM Company, the process takes 6-7 months, providing that you can get a minimum of~at least} half of the apartment owners to sign up within two weeks of incorporation. If they have signed up before you decide to incorporate, then it takes just over 20 weeks from incorporation.
Of course, there is no guarantee that it will be all plain sailing, and some Landlords may look for reasons to delay or frustrate the process. Typically most Landlords are now resigned to the new rights of lessees.