Leaseholders in blocks of flats have the ‘right to manage’ (RTM) their homes by setting up a management company to take-over management from the freeholder. However, at present few exercise the right as it is seen as too uncertain and expensive. The Law Commission now wants to make it quicker and easier for leaseholders to take over the management their own properties.
RTM was introduced by the government in 2002. It allows leaseholders to take over the management of their flats without having to prove mismanagement by their landlord. Take-up of the right has been very low. Leaseholders complain that the procedures are complex with small procedural errors blocking their RTM. They also say that costs are too high with them having to meet most of the landlord’s costs.
Now the Law Commission is consulting on measures to simplify the system. It also wants to strip away restrictions which prevent owners in blocks with more than 25% commercial space from managing their own properties. The Law Commission’s plans are expected to make it far easier for homeowners to exercise their RTM.
Stephen Lewis, Commercial and Common Law Commissioner said: “The right-to-manage process is not working at the moment and change is needed. This is a very practical project and we’ve been focused on developing proposals that make sure the Right to Manage is more user-friendly, particularly for leaseholders.”
James Burgoyne of Brunel Professions is concerned at the effect on professional Property Managers, and whether these proposals will decrease business to them. However he thinks there may be a silver lining. “To date, leaseholders who are unhappy with the way the landlord is managing their properties have felt there is little they can do. Their frustration can spill over into relations with the landlord’s Property Manager, with issues turning into complaints and E&O allegations against the Manager.”