The duties of the managing agent is to supervise and implement the day to day maintenance of the development i.e. common areas, landscaping car parks etc. The managing agent is appointed by freeholder and is often a company that is either owned by or part of the a group of companies controlled by the freeholder. The residents (owners) have no control of the way their homes are being managed and maintained.
We have experience of the Right To Manage process, and we already manage a number of developments some as a result of request from property owners, to take over from existing management companies, where the owners felt that they are not receiving the service they expect.
We often “pick up the pieces” from other Management Companies and restore confidence by offering best value for money. No one will try harder and getting the best arrangement resulting in what we like to call “Sensible Service Charges”.
We operate an ‘open book’ policy where all the costs relating to the development are available for all the shareholders to comment upon.
We are prepared to assist with set up and establish the RTM company on your behalf. All we seek is that we are appointed as managing agents for a minimum period of 12 months. At the end of that period the RTM company then has the right to review our appointment. Should the service we provide be acceptable, this appointment to be renewed.
Even if after 12 months you decide to appoint another managing agent you will be able to do so, but at present you do not have that right.
What is the Qualification for Right to Manage?
To set up a Right to Manage Company certain conditions must be met and a minimum number of leaseholders are required to take part:
- 50% of flat-owners must want to go through the process.
- 2/3 must have long leases at time of issue
- Less than 25% of floor area of building must be commercial
There are a number of obscure matters which may affect you but you are best advised to take legal advice anyway and these matters will then be addressed. They typically affect just 1% of the population who may undertake the right to manage process.
Alternatives to Right to Manage
There are two main alternatives to Right to Manage but both have significant problems:
- Freehold purchase - expensive if your lease is short, a waste of money if your lease is long.
- Application to The First-Tier Tribunal for a change of management - at best temporary and usually rejected because the burden of proof of negligence is not met.
Advantages of Right to Manage
Right to Manage grants leaseholders the right to control the management of their block through the RTM Company.
It allows leaseholders to gain control of the management of their block from freeholder.
The leaseholders will normally need to outsource management to a competent company but will have at least control over the contractual specification (ie, what services are provided) and the choice of termination of contract.
The criteria which the leaseholders must meet to exercise their right to control the management are usually satisfied by most flat-owners.
The leaseholders are not required to prove that the leaseholder or his managing agent is managing the building poorly.
The only financial obligation beyond the right to manage company's fees (which are usually low) would be the 'reasonable legal costs' of the freeholder. Typically, these would be recovered in the first year through reduced management fees.
All leaseholders in the property are entitled to be part of the Right to Manage Company and have equal right of access to and voting powers.