Right To Manage Process
Right To Manage, often known as RTM, is a legal process under the Leasehold and Commonhold Reform Act 2002, where leaseholders can acquire the management functions of all or a part of their development. Once complete, the acquisition of RTM places all responsibility for the management, maintenance and insurance of the building or development onto the new Right To Manage Company (RTM Co), removing these powers from the current decision maker, which is usually the Freeholder (Landlord) or an existing Management Company.
If you are considering Right to Manage to gain control of the management of you development, then Watson’s can help you. The RTM process has a prescribed route which must be followed correctly if RTM is to be successfully acquired. RTM does not require fault to be proven and therefore if fully eligible and administered correctly the process cannot fail. Watson can professionally undertake the process in house or work with selected partners who are experts in administering this process and who have successfully undertaken some of the largest and most complex RTM claims in the UK.
With Watson, the process need not be costly or onerous either. Our aim is usually to manage your development and as such we offer a range packages to keep RTM affordable, including the reimbursement of some RTM fees from our first year’s management fee - providing we have been securely appointed by the new RTM Company to manage the development following RTM acquisition. This effectively means that undertaking Right To manage in order to change to Watson is easy and can even be free of charge.
- Every participating dwelling must be an Apartment (Houses are excluded from this legislation entirely)
- At least 50% of the flat-owners within the physical block of flats must want to go through the process
- At least 2/3rds of the flat-owners within the physical block must have long leases (greater than 21 years at the time of issue)
- No more than 25% of floor area of the block may be used for non-residential use (excludes car parks and common areas connected with the flats.
How Long Will It Take? The Prescribed Route
The prescribed route/timescales involved in the RTM process are outlined here:
- Contact the other leaseholders and obtain the support of at least 50% of the qualifying leaseholders
- Once 50% support is obtained Incorporate the RTM Co
- The company then issues Section 78 notices of participation
- The leaseholders then have 14 days to reply; at least 50% of qualifying owners must accept
- Issue Section 79 claim notice on the landlord specifying determination date at least 3 months from the last date the landlord can serve a counter notice
- The Landlord has 28 days to serve a Section 84 counter notice disputing the validity of the claim
- If the Landlord serves notice, the RTM Co has 60 days to apply to the First Tier Tribunal (FTT) for determination on the validity of the claim
- If landlord does not complete Section 84 counter notice then the RTM Co automatically takes over the management from acquisition date
- Issue if necessary, section 82 right to information requesting information from landlord in order to take over the management
- Landlord has 28 days to provide the information
- Issue if necessary, Section 83 right of access notice if a property inspection is required and access is restricted
- Right of access must be at least 10 days after the Section 83 right of access notice landlord may also request access in the same manner
- At the acquisition date, the RTM Co serves a Section 92 notice on the landlord requiring them to notify all contractors that RTM has been acquired and all contracts are frustrated
- The RTM Co serves Section 93 notice of duty to provide information on the landlord (Notice cannot be issued before the date of acquisition)
- Information must be provided within 28 days after the notice is issued
- The RTM Co issues a Section 94 notice requiring the landlord to transfer the net balance of any service charges to the RTM as soon as possible after the date of acquisition. Proper outstanding costs can be deducted before the transfer