Once the Right To Manage company has acquired the Right To Manage they can, begin managing the building from the date stated in their original Notice of Claim (‘the Acquisition Date’).

Any service charge that has been collected by the landlord before the Acquisition Date but has not yet spent, must be handed over to the Right To Manage company. This may include a reserve or sinking fund. As the Right To Manage company is not required to have capital at the outset, it is vital that any remaining service charge is reclaimed from the landlord  as soon after the Acquisition Date as possible.

Where there is a dispute as to how much money should be handed over (having taken account of the landlords previous expenditure), an application for determination of the amount, can be made to the Leasehold Valuation Tribunal (‘LVT’).

A Right To Manage Notice of claim cannot be registered against the landlord’s title. However, once the Right To Manage has been acquired, the Right To Manage company can apply for their Right To Manage to be registered on the Proprietorship Register of the landlord’s title.

The ‘Management Functions’ pass to the Right To Manage company on the Acquisition Date. These are defined in the legislation as being:

1. Repairs, decoration and maintenance of the structure of the building, including the common parts- to include the cyclical or seasonal maintenance of plant and facilities (for example, lifts, communal central heating and boilers).
2. Improvements to the building (where specified in the leases of the leasehold flats within the building).
3. Lighting and cleaning of common parts
4. Grounds maintenance, caretaking and the provision of a porter or warden (where appropriate).
5. Buildings Insurance.
6. The collection of service charges
7. Keeping of accounts and the provision of statutory and other information.
8. Compliance with all the statutory requirements affecting the building.
9. Day to day management of the building.
10. The granting of approvals
11. The enforcement of the Tenant’s covenants within the leases of the leasehold flats within the building.

Functions Remaining with the Landlord

When the Right To Manage Company acquires the Right To Manage their powers are limited to the management of the building, the rest of the landlord’s obligations within the leases of the leasehold flats, remain with the landlord for example:

1. The right to collect ground rents
2. The functions relating to forfeiture and possession. 
3. The management of any commercial or non-residential parts of the building (for example retail units).
4. Management and control of flats in the building which are owned and let by the landlord on for example, an Assured Shorthold Tenancy.
5. Responsibility for those of the landlord obligations under the leases that do not relate to the maintenance and management of the building

Should the Right To Manage company wish to take possession of a flat for example, where there are arrears of service charge, they cannot seek possession directly and will need to seek the co-operation of the landlord.

Any monies due to the landlord before the Acquisition Date, remains payable to the landlord and cannot be collected by the Right To Manage company.

The granting of consents and approvals for example, for the sub-letting of a flat, falls to the Right To Manage company from the Acquistion Date, however they are legally obliged to give notice of the grant of such consents or approvals to the landlord before they are granted. 

Where the granting of the approval or consent relates to assignment, sub-letting, placing a charge on the flat, parting with possession, making structural alterations or changing the use of the flat or unit, the Right To Manage company must give the landlord 30 days notice. In the case of the grant of all other types of approval or consent, the notice period is 14 days. Where the landlord objects to the grant of an approval or consent, the Right To Manage cannot grant the approval until the landlord withdraws his objection or the matter is resolved by an application to the Leasehold Valuation Tribunal ('LVT'..

Where a lease provides the landlord with a right to access to the leasehold flats within the building for example, for inspection of repair and condition, the Right To Manage will also acquire that right.

Termination of a Right To Manage

Once a Right To Manage has been acquired, there is no time limit for its existence and the Right To Manage will continue in force until it is terminated.

The Right To Manage can be brought to an end in the following circumstances:

1. With the agreement of the landlord- the Right To Manage company agrees with the landlord to return the management of the building to the landlord.  The Right To Manage company cannot force the landlord to take back the management of the building from them.
2. The Right To Manage company collapses or is dissolved or struck off the company register. In these circumstances the Right To Manage company will lose their Right To Manage and the responsibility for the management of the building will be returned to the landlord.
3. The court appoints a manager. Under  Part II of the Landlord and Tenant Act 1987 a LVT may appoint a manager to take over the management of the building. Such appointment may be made where the Right To Manage company is for example, in breach of an obligation under the leases of the leasehold flats within the building or has demanded unreasonable service charges, or has failed to comply  with the code of management practice.

The appointment of a manager by the LVT may be as a result of an application by the leaseholders in the building; an alternative order by the LVT in such circumstances may be to simply remove the Right To Manage from the Right To Manage company and return the management of the building to the landlord.

Once a Right To Manage has been terminated it cannot be reinstated for another four years other than with the consent of the LVT.

At iconvey, we are specialists in conveyancing and Property Law with many years of experience of Leasehold properties.  Our professional and knowledgeable conveyancers are always at hand keeping  you informed every step of the way.  We ensure that you are always aware of the costs at the outset with a transparent fee structure and no hidden fees.

See : ‘Leasehold – Right to Manage Part V- Summary of the Steps for Acquiring a RTM available on this website

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