You must meet qualifying conditions before registering a right-to-manage (RTM) company.

First, the company must be a private company limited by guarantee, with at least one director and two members. These three officials must be qualifying tenants with leases originally granted for more than 21 years.

Second, the building subject to the RTM should not be owned by a local housing authority and must have at least two flats. Additionally, no more than 25% of the total floor area (excluding common spaces like stairs, halls, and car parks) can be used commercially.

Furthermore, the qualifying tenants must occupy over 66% of the residential property. Once these conditions are met, the company can be registered but can only become operational if 50% of the qualifying tenants agree to join it, demonstrating sufficient support among the residents.

There is also an exemption for resident landlords in some instances, known as the Resident Landlord Exemption, that may make a building ineligible for RTM. This exemption only applies if all the following conditions hold:

• The premises are not a purpose-built block (for example, a converted house),
• It comprises no more than four flats
• For the last twelve months, the freeholder or an adult family member has occupied one of the flats as their only or principal home.

Setting up an RTM company allows renters to have greater control over the management of their building, including decisions on maintenance, repairs, and service charges. It can also lead to cost savings and improved service quality.

Once you determine that your building is eligible for the right to manage, register a private company limited by guarantee with the appropriate RTM articles of association. The company must have at least one director and two qualifying residents as members.

No, you do not need legal assistance to form your RTM company. We will review your application to ensure that you meet all the requirements and are eligible. However, you may need a solicitor to help you claim the RTM after company formation.

To pursue the right to manage, it is essential to understand the associated costs and the implications of your actions. Additionally, securing widespread support from the qualifying occupants is crucial for a successful claim. Below is a detail of the process.

1. Secure Support from residents
   • After registration, serve a notice of participation to the residents to secure the support of at least 50% of the qualifying residents.
   • The notice should include the company details, such as its name and registration number, and the intention to acquire the right to manage. It should also include an invitation to the qualifying tenants to become members of the RTM company and participate in the management of their building.
   • Notice should also describe the scope of the management powers the RTM seeks to obtain.
   • Further, the notice should also include that the company members will be liable for the landowner’s reasonable costs resulting from the RTM application. Such costs may include admitting the claim, filing a counter notice, and other incidental expenses.
   • Occupants have 14 days to respond to the notice.
2. Serve a notice of claim to the landowner and copy the leaseholders.
   • Serve a notice of claim to the freeholder, informing them of the intention to acquire the right to manage. Copy the qualifying occupants and include the company's details in the notice.
   • The property owner will have one month to respond by either admitting the claim or serving a counter-notice disputing it on specific grounds, such as the building's eligibility or the percentage of leaseholder support.
3. Resolving any arising disputes
   • If the land owner disputes the claim, the matter may be referred to the First-tier Tribunal (Property Chamber) for resolution. The tribunal will determine whether the RTM claim is valid.
4. Handing over the right to manage
   • If the property owner does not dispute the claim or the tribunal rules in favour of the residents, the RTM takes over the management of the building four months from the date of the claim notice.

The costs associated with acquiring the right to manage can vary based on the specifics of each situation. However, the general costs include:

• Company Formation Costs:
  • Your Company Formations Service Fee: £38.99
  • Companies House: £50.00
  • This means the total incorporation costs will be approximately £88.99.
• Land registry search costs
  • You will need to conduct a land search to ascertain the property's ownership and identify the renters. Depending on the property's leasehold value, this search can cost approximately £1,500.
• Leasehold Advisory Services:
  • You may need to engage a solicitor to help draft and serve notices. These fees may vary but expect to pay around £1,000 on average.
• Landowner Reasonable Costs:
  • These are the costs incurred by the land owner, which you may be required to cover. This can include legal fees and other related expenses. On average, these costs might be around £1,000.

Therefore, the total estimated costs would be £5,000, including any miscellaneous expenses. Please note that actual costs may vary based on individual circumstances and the complexity of the process.

The process of forming an RTM company and taking over management functions of a building can take several months, depending on the complexity of the situation and any disputes that may arise. An uncontested RTM usually takes about six months.

Yes, tenants can buy the freehold of their apartments either through an offer from the owner, who has a legal responsibility to give the tenants the first right of refusal, or by initiating the process themselves through collective enfranchisement.

• Right of First Refusal: Landlords who want to sell the freehold must offer it to the leaseholders first. This allows tenants to purchase the freehold before it is offered to external buyers.
• Collective Enfranchisement: Tenants can also approach the property owner with an offer to buy the freehold through collective enfranchisement. The eligibility requirements for collective enfranchisement are similar to those for the Right to Manage (RTM). Here are the steps involved:
  • Organise Participating Leaseholders: At least 50% of the renters must be willing to participate.
  • Instruct a Solicitor: Legal advice and services are crucial for navigating the process.
  • Enter into a Participation Agreement: This agreement outlines the terms and commitments of the participating leaseholders.
  • Obtain a Professional Valuation: A professional freehold valuation is necessary to make a fair offer.
  • Choose a Nominee Purchaser: Typically, this company is formed by the tenants to act as the purchasing entity.
  • Serve Notice on the Freeholder: The formal process begins with serving a notice to the freeholder, stating the intention to purchase the freehold.

By following these steps, tenants can successfully buy the freehold of their apartments, gaining greater control over the management and maintenance of their property.

An RTM company manages and maintains the building, including arranging repairs, collecting service charges, and ensuring compliance with health and safety regulations.

Yes, the freeholder can challenge the formation of an RTM company on specific grounds, such as the building not qualifying for RTM or procedural errors in the formation process.

The standard property rights apply to both tenants and landowners within the RTM context as follows:

• The leaseholders have the right to —
  • Manage — According to the Commonhold and Leasehold Reform Act 2002, qualifying leaseholders can take over the management of their building without needing to prove that the owner has mismanaged it.
  • Access Information — Can request any information relevant to their leasehold title, especially regarding maintenance contracts and service charges.
  • Participation — Have the right to manage their flats, including establishing service costs, appointing contractors, and selecting a managing agent.
• The landowner has the right to —
  • Ownership Rights — The property owner maintains the freehold even after transferring the RTM to the tenants.
  • Access Information — The landlord has the right to any information on RTM arrangements.
  • Compensation — The landlord has the right to reasonable compensation for any costs incurred during the RTM process.
  • Membership in the RTM Company — Property owners have the right to be members and vote during decision-making in the RTM company.

Yes, tenants should hire a solicitor during the Right to Manage (RTM) process. A solicitor provides essential legal guidance, helps draft and serve necessary notices, and ensures compliance with legal requirements. They also help avoid mistakes, handle disputes, and ensure all documentation is correctly prepared. While some aspects of the RTM process can be managed independently, having a solicitor involved increases the chances of a smooth and successful transition.

If leaseholders decide to dissolve the RTM company, management responsibilities would revert to the landowner, or a new arrangement would need to be made for the building's management.

Yes, once the RTM company is in place, leaseholders can change agents if they are unsatisfied with the current management.

Leaseholders have the right to address their concerns and, if necessary, take steps to replace the directors or agents to ensure proper management of the building.

The key difference lies in their membership and objectives. An RTM company is formed by leaseholders aiming to take over the management of their property. In contrast, a property management company is typically formed by stakeholders whose interests extend beyond leases, such as landowners, who manage properties for various purposes.