Right to Manage

Many tenants want to obtain the Right to Manage so that they can arrange their own insurance for their block of flats, have moderate administration fees and arrange for repairs and maintenance to be undertaken. Once the Right to Manage has been obtained, what are often perceived to be excessive charges by the freeholder and/or their managing agent can be avoided.

A Right to Manageapplication can therefore be a way of dealing with bad management and may facilitate the removal of an underperforming agent. The process is considered to be more straightforward than applying to the First Tier Tribunal to have a new manager appointed after proving that there have been shortcomings in the service provided.

The qualifying criteria for obtaining the Right to Manage are as follows:

• The building must be self-contained, i.e., not part of another building and capable of being redeveloped independently.

• At least two-thirds of the flats must be let to qualifying tenants (being a leaseholder whose lease was granted originally for a term of at least 21 years).

• There must be a minimum of two flats.

• Fifty percent of the qualifying tenants must be willing to participate in the Right to Manage application.

• Any commercial parts of the building must not exceed 25% of the total floor space.

We can advise whether your building meets the above requirements and then prepare a Participation Agreement setting out the terms upon which all of the tenants will collectively make the application and contribute towards its costs. If there is any question about the proportion of commercial floor space or whether your building is truly self-contained, we can help by instructing a surveyor to carry out an inspection and answer these questions.

If the legal requirements for the Right to Manage application are met, we can incorporate a company to exercise the management responsibilities of which the participating tenants will be members. In the case of a large development with a number of blocks, it might be necessary to incorporate more than one company.

Once the Right to Manage companies have been incorporated, we can arrange to serve a Notice Inviting Participation, which must be sent to all qualifying leaseholders who do not become members of the Right to Manage company from the outset. Service of this notice might require us to request further information from the landlord by serving a Section 82 Notice.

Once the Notice Inviting Participation has been served, a formal Notice of Claim can be served upon the landlord, which gives it one month to respond with a Counter-Notice if it wishes to oppose the application. A further Section 83 Notice might also need to be served at this time if there is any part of the building, which only the landlord or its agents can access, needs to be inspected by the Right to Manage company and its proposed agents prior to acquiring the Right to Manage.

The vast majority of Right to Manage applications proceed without any Counter-Notice being served by the landlord but we can assist you if there is a dispute about whether the management functions should pass to the Right to Manage company.