Is Your Block of Flats Eligible Under the Right to Manage Rules?
In 2002 the Commonhold and Leasehold Reform Act changed the way that blocks of flats could be managed in the UK. Previous to this legislation landlords contracted with a management company which would look after the maintenance to the building. This usually meant that tenants had no input and were paying a fee for the landlord to dictate what needed doing.
The new law changed all this however. It allowed leasehold tenants to exercise the right to manage their own block of flats, provided they could meet the conditions that were set down in the law. This opened the way for tenants who were dissatisfied to do something about the less than perfect situation they sometimes found themselves in.
The solution is right to manage company formation. This means that the tenants can create a company that is able to take over the maintenance of the building. That company can then set the maintenance fees and decide how and when they will be spent.
There is a specific set of criteria that must be met before this can happen though. For example the flats in question must be in a self contained block, and at least three quarters of them is required to be residential in nature. Business leases do not come under the legislation. Similarly no charitable housing block can apply for a right to manage company formation.
Proper qualification for a right to manage also means you have to have a lease lasting more than twenty one years into the future. Anything less than this precludes you from applying. This rule must also apply to at least two thirds of all the other residents living in the block. You also need at least half of all the tenants in the block to agree to the new arrangement, and they must also be willing to join the right to manage company when it is formed.
It may sound like there are a lot of obstacles in the way of using your right to manage. But since there are many advantages to doing it, you will often find that many tenants can see they will benefit from getting involved. This is particularly the case if you are unhappy with the results achieved by the existing management company. It could be easier than you think to go through right to manage company formation and come out the other end in a better situation.
About the Author
Bonallack & Bishop are specialist in helping you exercise your right to manage (http://righttomanagecompanyuk.co.uk ). If you want more information on the right to manage company formation [http://righttomanagecompanyuk.co.uk/right_to_manage_company_formation.aspx ] then contact one of their solicitors today. Senior Partner Tim Bishop is responsible for all major strategic decisions.
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