Hi, Does anybody have any experience of tenants taking over management of a residential building under the Right to Manage optiona? We have a flat in South London where the managing agent has been appalling. (This is the second agent we have used) As residents, we are all considering taking over the right to manage. Would be grateful for any comments from someone with expeience/knowledge of this? Thanks
K. Gdaniec ● 41d20 Comments
"Equally cases come before the Tribunal where, because the Freeholder hasn't followed the correct process, the Leaseholder doesn't have to pay for necessary work - and the building falls into disrepair"I think you are saying that if the Leaseholders are also the Freeholders there could be a conflict of interest between them regarding eg: the good maintenance including statutory inspections and the safety of the building and its residents -v- cheap unmaintained and unsafe accommodation with little outgoings.Every so often the Fire Service condemns buildings - and that is not necessarily after a fire.
Philippa Bond ● 36d
I completely agree with Peter's second para here. There are responsibilities which may seem easy and trivial when all leaseholders are in agreement but building safety is very important and some people take it a lot less seriously than others, and many are ignorant (true meaning) of building safety. Fire Prevention Officers have the most amazing film of lack of building safety. All the building defects that are found later or changes in Building Regs after construction which although MAY not technically have to be adhered to now are obviously better adhered to now for EVERYBODY'S safety's sake especially in the light of Grenfell and preceding fires where Coroners' reports were not acted on. Any buildings with many leaseholders and perhaps tenants as well NEED strict management. There will be leaseholders who won't pay even though they can afford to and somebody needs to be able to sort that out together with how there is more likely to be more agreement for repainting and new carpets than a sinking fund for more major things like roof and lift repair and renewal! A management company should be advising on how much is necessary for this instead of allowing a building to deteriorate without enough maintenance and planning for any more substantial problems.In some blocks of flats the easeholders each have a share of the freehold.I see that there is now a developer suing all subcontractors after they have been made to remediate a building.It is interesting how so very many buildings were built that now suddenly need remediation.
Philippa Bond ● 37d
As others have suggested, there are still legal protections for a leaseholder sharing a building with a live-in freeholder, such as costs being correctly accounted for and notice given for any major works, etc. Having said that, it's still possible to get locked into conflict with a resident freeholder, who perhaps still think the whole building is 'theirs'. Equally, cases often come before the Tribunal where, because the freeholder hasn't followed the correct process, the Leaseholder doesn't have to pay for necessary work - and the building falls into disrepair.
Peter Evans ● 37d
"the freeholder can do whatever she wants."That's not the case. There are laws about consultation and spend which if not followed can be grounds for taking legal action. For example anything that costs over £250 per flat in the whole building(s) [2 flats means £500 and so on] means a Section 20 programme must be completed - 1 month consultation for ideas and suggestions of contractors and another month for consultation on tenders. This come under the: 'Landlord and Tennant Act 1985 as amended.'There are other restrictions which means you need a Managing Agent or some professional advice to keep up to date with all the changes.
Martin Weaver ● 37d
Thanks Craig. I thought that might be the case. I think estate agents should draw attention to the fact that the freeholder lives in the building and that sometimes this can be difficult because the freeholder can do whatever she wants.
Stewart Jones ● 40d
Never buy a lease if one of the other properties is owned by the freeholder. Many of the protections are void in this scenario,
Craig David Mcdowell ● 40d
You’ve had many replies but I echo the suggestion to go to https://www.lease-advice.org/They are super helpful, & can get you started on your long journey, particularly if the freeholder is unhelpful and/or obstructive. I’ve been down that road with the Tribunal appointing a new manager. Another good thing to do on the same Leasehold advisory service site is to search the Tribunal decisions for any new manger you are thinking of engaging. Sometimes it can be enlightening ;)
Susan Sheales ● 40d
Can I ask how the right to manage works if the freeholder lives in the building? I have a friend who has bought the first floor flat in a house converted into three separate flats. The freeholder lives on the ground floor and manages it herself. She charges the leaseholders for her time in responding to queries and or every possible thing. I suspect that not much can be done unless she acts unlawfully in some way.
Stewart Jones ● 40d
As I understand it, Right to Manage (RTM) and Enfranchisement are separate things. RTM is the legally-acquired right for Leaseholders just to manage the development, either by agreement with the Freeholder or through a Tribunal. The Freeholder still owns the freehold and retains the other rights that go with it, such as collecting ground rent - so Leaseholders don't fully 'escape'! It's Enfranchisement that allows Leaseholders to buy the freehold and to have complete control and responsibility for the building.
Peter Evans ● 40d
"I suspect that the right to appoint a management company rests with the freeholder". You are correct, the appointment lies with the freehold company. If and when the leaseholders escape from the current freeholder via the Right to Manage process, they can then appoint another management company if they wish. Also note in this thread that nomenclature can be confusing, under the Landlord & Tenant Act managing agents and freeholders may well refer to leaseholders in documentation and correspondence as tenants, even if certain leaseholders are renting their flats to tenants!
Paul Charlton ● 40d
I've been involved in this process a few times as a Leaseholder. You've probably done your own research, but if enough leaseholders want it, there's a formal process to apply to your freeholder for the Right to Manage which, if contested, ends up at the First Tier Tribunal who will normally give you Right to Manage and appoint new professional management independent of the freeholder. In practice, you might find a management company you fancy to help you with this in the expectation that they'll be appointed. It's tempting for leaseholders to consider literally managing the building themselves, but I'd advise against this as it can create all kinds of internal tensions over what needs doing and how much things cost, with difficulties chasing up outstanding service charges and dealing with any anti-social behaviour. It's far better to leave all that to an independent company whose job it is to look after the building properly. Initially this can be testing for leaseholders, particularly if the building was neglected by the previous management, as maintenance costs are likely to go up to compensate and to get the building into proper shape. Previous 'activist' leaseholders must also get used to stepping back and letting the professionals do their job! A further step to consider is for the Leaseholders to buy the freehold of the building through Collective Enfranchisement, and there's another legal process to properly set that up. One advantage of this is that the Leaseholders can collectively issue themselves 999 year leases at zero ground rent at little cost to themselves. Again there's the potential for internal tension between individual leaseholders, so it's vital to have professional management and proper legal structures in place.
Peter Evans ● 40d
That's incorrect - the right to manage lies with the leaseholders, whether or not the freeholder agrees. The whole point is to prevent leaseholders being ripped off by the freeholder. It is correct that tenants don't get a say in the matter.If the block of flats is sufficiently small, you may wish to consider managing it yourselves by setting up your own management company, with each leaseholder having an equal share (or a share in proportion to the size of the property), with the share being tied to the leasehold so that it passes to the new leaseholder when the property is sold.
Andrzej Kowalski ● 40d
The OP said "The flats currently has a lousy management company and an equally useless new freeholder"I suspect that the right to appoint a management company rests with the freeholder, and leaseholders (let alone tenants) cannot unilaterally change it without the freeholder's agreement.
Richard Greenhough ● 40d
if you're the freeholders you can appoint who you want, you can probably replace the agent but will need a majority, it will be in your leases.You will probably still need an agent for the reasons alreay mentioned.Blue Crystal property management in Chiswick are well worth checking out.
Craig David Mcdowell ● 40d
Go to the website https://www.lease-advice.org/ and there is a mass of information on it including RTM factsheets.
Paul Charlton ● 40d
And it's a big deal to move away from a poor one as the new company will spend a couple of years trying to figure out what on earth they have done as all the record will be incomplete. Thus you can't change management companies as quick as the good people move on.
John Hall ● 40d
It's extraordinarily hard to get a good block management company. It's a revolving door industry where the good people seem to move on very quickly.
John Hall ● 40d
Thanks. Yes. I can see pitfalls like that aplenty. So am nervous. The flats currently has a lousy management company and an equally useless new freeholder on top of cladding issues. Beautiful block lovely apartments but sadly not run well. All residents are very proactive which is in our favour.
K. Gdaniec ● 41d