A1 Company Services

Right to Manage Companies

The Commonhold & Leasehold Reform Act 2002 came into effect on September the 30th 2003 and provides a right to leaseholders in flats to force a transfer of the landlord’s management functions to a company of their own – a Right To Manage company, or RTM. This empowers leaseholders, subject to the satisfaction of certain criteria, to take responsibility for their homes’ management and is not simply there to allow the removal of any control from a landlord – good, bad or otherwise!

The right is only open to leaseholders of Flats, not Houses.

So long as the relevant criteria are met, the landlord’s consent is not required and neither is any reversion to the courts or a tribunal although there is a fairly lengthy procedure to be followed and specialist legal advice should be sought. We can, however, register a company in the appropriate format for use in any such procedure.

The right is exercised by serving a formal written notice upon the Landlord who may, after the appropriate periods of time have elapsed, become a member of the new company himself once the right to manage has been acquired.

The criteria that must be satisfied, and considered before any other action is taken, are as follows:

  • The building must be self-contained (or if part of another building, be capable of being redeveloped independently)
  • It must include at least two flats
  • At least two-thirds of the flats must be let to 'qualifying tenants' *
  • It can be part-commercial but the non-residential part must not exceed 25% of the total floor area
  • The right to manage may only be exercised by a right to manage company and the members of the Right To Manage (RTM) company must comprise a sufficient number of qualifying tenants. The required minimum number of qualifying tenants must be equal to at least half the total number of flats in the building
  • The right relates to a building, so, in an estate of separate blocks, each block would need to qualify separately and an individual Right To Manage (RTM) notice served. In the case of an estate of flats under the same management, it would be sensible to take over the management of the whole estate, but this would have to be accomplished by application in respect of each separate block

* A 'qualifying tenant' is a leaseholder whose lease was originally granted for an original term of more than 21 years. There is no requirement for any past or present residence in the flats, nor any limit on the number of flats which can be owned by one person.

Once formed, the Right To Manage Company must formally invite any leaseholders that did not participate in the formation of the Company to become members.

The Right To Manage Company itself must be limited by guarantee and not have a share capital and its Articles of Association must follow a specified form as laid down by the legislation.

The only changes to the specified format that are allowed are the insertion of the name of the Company and the full address of the property to be managed. The name of the Company must end with the suffix "RTM Company Limited" which should normally be prefixed with a description of the property itself. For example, if we were allowed to do so and were a residential block, our address as inserted into the Memorandum of Association would be:

2 Woodberry Grove, North Finchley, London, N12 0DR

and the name of the Company could be:

2 Woodberry Grove RTM Company Limited

Price  
Right to Manage (RTM) Pack price (Basic, Standard, Executive) + £50

How to Order

To order a Right To Manage company please contact us via our enquiry form or call us on 020 8492 6363 .