WHAT IS RIGHT TO MANAGE (RTM)
The Commonhold and Leasehold reform Act 2002 allows leasehold tenants to remove the company which manages their apartments and either manage the building themselves or replace it with a better management company.
Acquiring the Right To Manage (RTM) is an alternative to buying the Freehold because it is cheaper and quicker. There is no purchase price to pay as you would not be obtaining any legal title to the land, you would just be exercising your rights under the legislation. One usual advantage to purchasing the Freehold is that the residents would not have to pay any ground rent.
HOW MUCH DOES IT COST
I have seen advertisements where companies typically charge £35 per apartment (including VAT) subject to a minimum charge of £500.00
DO YOU QUALIFY FOR RIGHT TO MANAGE (RTM)
|1||If there is a commercial unit within the building which is more than 25% of the total floor area within the building then you will not qualify for Right to Manage (RTM).|
|2||At least 2/3 of the apartments within the building must originally have been let on long leases of at least 21 years or more.|
|3||At least 50% of all apartments must participate in the Right To Manage (RTM) Scheme.|
|1||The first step is to set up a Right To Manage (RTM) company.|
|2||The Right To Manage (RTM) company must then serve notices on all the non participating apartments owners.|
|3||After 14 days of serving the notice on the non participating apartment owners, a further notice is served on the Freeholder.|
|4||The Freeholder has 1 month to respond with a council notice either accepting or rejecting the Right To Manage.|
|5||If the Freeholder accepts our Right To Manage they will set a date for the acquisition of our Right To Manage which is approximately 3 months after the council notice date.|
|6||The whole process from beginning to end usually takes 4/5 months depending on the number of participating apartments.|
|7||Any funds held in a sinking fund or reserve fund must be transferred from the Landlord to the Right To Manage (RTM) company on the acquisition date.|
RESPONSIBILITIES OF THE RIGHT TO MANAGE (RTM) COMPANY
The management of the building can either be carried out by the Right To Manage (RTM) company or an external management company can be appointed. If the external management company do not meet your requirements they can be sacked and a new management company appointed. If the management of the building is carried out by the Right To Manage (RTM) group then they will need to arrange such things as
(a) To take out an appropriate building insurance.
(b) Arrange maintenance contracts for the Building
(c) Monitoring and payment of utility bills.
ADVANTAGES OF RIGHT TO MANAGE
(1) Typically savings of between 30% and 60% can be achieved on the maintenance charges
(2) Resale values of properties should increase on the basis of not being tied to a specific management company.