When the Government introduced the Commonhold and Leasehold Reform Act 2002 it provided leaseholders with a right to take control of the management of their building. This process is known as the 'Right to Manage' (RTM) and is open to all owners of private leasehold flats subject to a few perfectly reasonable criteria.

The majority of leaseholders do not own their freehold and have little control over the management of their building. Unwarranted loading of leaseholder service charges is a widespread and common problem. Unsurprisingly most leaseholders of private residential flats are interested in having a direct say in how their building is managed, in reducing their service charges and in making the managing agent accountable directly to them.

Conditions & qualifying criteria

there are only three conditions:

• At least half of the flat owners must agree to do this
• At least 75% of the building must be residential
• And at least two-thirds of the flat owners must have long leases

The lessees are not required to prove their current landlord is failing in their duties, or that their current agent is managing the building poorly. The lessees are not required to pay any compensation to the landlord for taking control of the management of the building. All leaseholders in the property are entitled to be part of the RTM company and have equal rights and voting powers.

Advantages of RTM

RTM allows leaseholders to gain control of the management of their block from ineffective landlords without requiring any consents or court orders.

• Allows the replacement of under-performing managers.
• Helps maintain standards and ensures competitive pricing and continued value for money.
• Gives the lessees full control over the decision-making process relating to the running of the development.

Decision making, such as the placement of the Buildings Insurance, engagement of contractors and level of service charge will now be firmly in the lessee's control.

How long will this take?

From the date of incorporation of the RTM Company, the process takes approximately five months, providing you can get at least half of the flat owners to sign up within two weeks of incorporation. If they have signed up before you decide to incorporate, then it takes just over 19 weeks from incorporation.

However, there is no guarantee that it will be all plain sailing, although our experience is that, generally, most Landlords are resigned to the new rights of lessees, and we are experiencing high demand for the formation of RTM Companies.