Leasehold:Right to Manage Part I- Requirements for a Right to Manage (‘RTM’)

Under the Commonhold and Leasehold Reform Act 2002 (‘the Act’) leaseholders have the statutory right to force their landlord to transfer the management of their building to a tenant run ‘Right to Manage’ company. In order to qualify for this statutory rights the building and the leaseholders have to meet the strict requirements set out in the Act.

What are the requirements to obtain the ‘Right to Manage (‘RTM’)‘?

1. The Right To Manage is not available to tenants of houses.
2. The Right To Manage will only be granted to a Right To Manage company and not to the individual leaseholders. There must be a Right To Manage company formed before making the application.
3. The Right To Manage relates to a building. So in an estate of separate blocks of flats, each block would have to have its own Right To Manage company. 
4. At least two thirds of the flats must be let to ‘qualifying tenants’(see below).
5. Not more than 25% of the building is non-residential.
6. The building does not fall within the ‘Resident Landlord Exemption’ (see below).
7. The Right To Manage can only be awarded to a Right To Manage company and an Right To Manage company must consist of qualifying tenants who own at least 50% of the number of flats in the building.

Resident Landlord Exemption:- This is where the building is not a purpose-built block and has less than four flats. One of the flats must be occupied by the landlord (or an adult member of their family) as their principal home for the twelve months before the application for the Right To Manage.

Qualifying Tenant: - A qualifying tenant  is a leaseholder with a lease that was originally granted for more than 21 years.The tenant does not have to be living in the flat or have ever lived in the flat and there is no limit as to how many of the flats in the building are owned by that tenant.

See : ‘Leasehold: Right to Manage Part II : Setting Up A Right to Manage (‘RTM’) Company’ available on this website

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