This is a short summary of right to manage. The longer guide has examples and forms:
https://www.leaseholdknowledge.com/full-right-to-manage-guide-and-forms
Legislation: Commonhold & Leasehold Reform Act 2002
What is Right to Manage (RTM)?
The right for the leaseholders of a building containing flats to take over management of the building from the freeholder, via an RTM company.
Qualification:
The right applies to leaseholders of a building or part of a building containing at least 2 flats.
At least two-thirds of the flats in the building must be owned by long leaseholders (leases of more than 21 years when first granted)
At least half of the flats in the building, held by long leaseholders, must take part.
The building does not qualify for RTM if the non-residential areas, eg shops, make up more than 25% of the whole floor area of the building.
The building may not qualify if there are four or fewer flats and there is a resident landlord.
Procedure:
Participating leaseholders must set up an RTM company using prescribed Articles of Association.
A notice inviting participation must be served on all leaseholders who are not members, or who have not agreed to become members.
A Notice of claim for RTM must be the served on the freeholder not earlier than 2 weeks after the above notice. This is a technical notice and, ideally, should be drawn up by a professional.
The freeholder can challenge RTM by counter-notice within one month. If he does, the RTM company can apply to the First-tier tribunal (Property Chamber), or Leasehold Valuation Tribunal where the building is in Wales, for a ruling as to whether they have the Right to Manage.
If the freeholder does not challenge, the RTM company acquires Right to manage four months from the date of the notice of claim. (“the acquisition date”)
The freeholder should notify the RTM company of existing contractors and also notify those contractors of the take over by the RTM company
Management:
The RTM company does not have to keep on the freeholder`s existing contractors, eg managing agents. They can employ their own agents, or manage the building themselves.
The RTM company takes on all management functions under the lease, although the freeholder has to be kept informed on such matters as consents eg to alterations or letting.
The RTM company has the power to enforce obligations under the lease, but not to use the forfeiture procedure.
The freeholder is entitled to apply to be a member of the RTM company after the acquisition date.
The RTM company must abide by the Articles of Association and company law. Officers of the company will be needed eg Directors.
