The Commonhold and Leasehold Reform Act 2002 has given leasehold property owners in England the opportunity to exercise their right to manage ('RTM') the running of their building.
The Right to Manage is a statutory right granted to leaseholders, who as a collective (at least 50% of qualifying tenants) can form an RTM Company and acquire the management functions listed in their leases – essentially taking control of their own management.
Not less than 50% of the flats in the building must be participating members of the RTM company on the date that the Right to Manage is claimed and if your building is not disqualified, you would succeed in such a venture.
The Right to Manage is exercisable upon a "Building" or in situations where blocks are physically connected to others, the law allows the claim to be made over "part of a Building", provided that a vertical distinction can be made from the adjoining block that runs from the ground to the sky.
If the Building contains more than 25% non-residential floor-space (common parts excluded) then, it is taken outside the scope qualification. The building must also:
The Building (or part of the Building claimed as mentioned above) must also be self-contained, and the law defines this as whether it is "structurally detached".
Conceptually this means that a building (or part) can be physically touching another, but it must be structurally vertically divisible by any other part and if services (such as water and electricity conduits) are shared between it and any neighbouring building (or part) that the works that would be undertaken to separate them would not result in significant interruption to the occupiers of the rest of the building.
Unlike in earlier legislation that sought to deal with transfer of management (namely under the Landlord and Tenant Act 1987) under RTM, leaseholders can change the management without having to prove any fault on the part of the current landlord or manager. Through this RTM process leaseholders can effectively force the transfer of the landlord's management functions into the control of their Right To Manage company.
There could be many reasons as to why you as a leaseholder may wish to take over the responsibility to manage your building:
Whatever the reason, leaseholders could benefit directly from exercising the Right to Manage as long as they understand the responsibility that this brings.
Unlike in leasehold enfranchisement, in which you would be buying the freehold land, you do not have to pay a Premium in order to take over the management of your building. You will only have to pay the freeholder’s (and/or management company’s) reasonable legal and administrative costs incurred in the process, but these are usually affordable especially since such costs can be split with your fellow participating leaseholders.