Right to Manage

The most radical attempt at addressing the problems caused by negligent and incompetent managing agents came in Phase 2 of the Commonhold and Leasehold Reform Act 2002 introduced on the 30th September 2003. The Right to Manage (RTM) was proudly hailed as 'a group right for qualifying leaseholders to take over the management of their development without having to prove their landord and/or his management is at fault' and on the surface it's simple - get enough leaseholders together and swap your rubbish agent for one of your own choosing. As long as the criteria for both leaseholders and the building are met and the Notice of Participation inviting other qualifying leaseholders to become part of the management company is correctly sent, the process is relatively straightforward. It does need to be strictly adhered to in order for the claim not to be rejected.

There's no need to go to court and there is no compensation that needs to be paid, either to the landlord or to the existing managing agent (although landlords can recover their direct costs associated with the transfer of the management to the RTM Company). The only premium payable by leaseholders is whatever a company charges in setting up the RTM company with Companies House and following the RTM process. Some companies take it further and offer to manage the building themselves.

It is also possible to excercies the right if the freeholder is absent under s85 of the Commonhold and Leasehold Reform Act 2002.