We set up RTM Companies and provide management options beyond.

Step 2

What is an RTM Company?

A 'right to manage' (RTM) company is a recognisable legal entity created to manage an estate. Because you must name your RTM company on your Claim Notice it is necessary first to set up your RTM company. This is a properly constituted legal company in which those Leaseholders who participate become members.

Unless your Right to Manage company is set up in accordance with the Commonhold and Leasehold Reform Act 2002 your Right to Manage claim will fail. The RTM company must be limited by guarantee (as opposed to shares) and should bind Leaseholders to the compulsory Memorandum and Articles of Association (essentially the rules governing how the company is run and what it can and cannot do). (For help with recruiting members see STEP 1).

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Step 3 - The Participation Notice

Now that you have formed a RTM company the next step is to serve the Notice Inviting Participation, this is mandatory unless all lessees and the Freeholder have either opted in or out in writing and/or you trust them not to claim you did not exclude them later!. The RTM company must serve a Participation Notice to every qualifying leaseholder who has not already joined the company and the Freeholder. To do this you will need to know who each flat is registered to (see STEP 1).

Remember, a flat could be owned by one person in the flat, everyone in the flat, a trust, or a company.

An HM Land Registry search will tell you who owns each flat (Note: It is also possible to approach the landlord, his/her appointed Managing Agent or the Landlord's Solicitor, for this information by serving a formal Information Notice however this may alert the landlord to your intentions of seizing control of the block.)

You can post the Participation Notice or deliver it in person. Remember, every qualifying tenant and the Freeholder must receive it and is entitled to join the company

How to serve a Participation Notice

Download the Participation Notice, fill it in & server on all owners and the freeholder, £126 min or £10 per flat

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Step 4 - Complete Legal Work

Having waited 14 days since serving your Participation Notice you will be ready to serve a Section 79 Claim Notice (Section 79 of the Commonhold and Leasehold Reform Act 2002) providing membership of the RTM Company has reached more than 50% of the qualifying leaseholders. This is the Notice that informs your landlord of your intention to claim your Right to Manage.

The Claim Notice must be sent to

• the landlord,
• any third parties (such as an appointed Managing Agent), and
• You can post this notice or serve it in person.

Assuming the Landlord does not resist your claim (by serving a Counter Notice) the acquisition date for the Right to Manage is 4 months after the date of your Claim Notice. It may be worth considering, therefore, the timing of your initial Claim Notice to avoid busy periods, bank holidays and so on.

If the Landlord does not resist your claim, then congratulations you can take control of your property and the way it's services are managed.

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Step 5

Ok, so you have a difficult Landlord who disputes your claim.

The good news is that Leaseholders do not need to prove any fault on behalf of the landlord to exercise their Right To Manage.

To dispute the claim the landlord must prove that your Right to Manage application does not comply with the 2002 Act, for example, claiming there are

• Errors in the initial application,
• That your block is not a self-contained building, or part of a building
• Any commercial element exceeds 25% of the floor area,
• There are not enough flats owned on long leases.
• If it is not detached, 3 sub-tests must be met
1. there must be vertical divisions with the adjoining buildings, minimal deviation may not render your claim invalid – see Finland Street case
2. it must be capable of being redeveloped independently and
3. if there are shared facilities or services, they must be capable of being provided independently without significant interruption, ie:
1. Identifying the services not provided independently,
2. Can they provided independently,
3. If so what works are necessary,
4. What interruption would this entail,
5. Is this disruption “significant”?for example, heating, if the boiler house is shared with an adjoining block, your block will not be self contained and capable of RTM - See Oakwood Court case.

Assuming the Landlord does not resist your claim (by serving a Counter Notice) the acquisition date for the Right to Manage is 4 months after the date of your Claim Notice. It may be worth considering, therefore, the timing of your initial Claim Notice to avoid busy periods, bank holidays and so on.

If the Landlord does not resist your claim, then congratulations you can take control of your property and the way it's services are managed.

Download a Participation Agreement Pack Now £50+VAT

Want us to do it for you?

Get Ringley Legal Services to create a Participation Agreement for you £150 min or £10 per flat

Step 6 - Property Management after RTM

Property Management after RTM

Congratulations you've achieved your RTM. You can take control of your property and the way it's services are managed.

The effective date is either the date stated on your Claim Notice. From this date the RTM company is takes over the landlord's responsibilities for the maintenance, repair, collecting service charges, accounting, insurance and overall management of the block.

After the handover the landlord's position is similar to that of a leaseholder and if the landlord also a member of the RTM company they will have democratic voting right too. Like any other leaseholder in the block he/she may sue the RTM company for bad performance or apply to the FTT.

Before you gain control however, there are still few things you need to do:

• Collect as much information as possible from the landlord and any third parties (such as a managing agent) about the building.
  • A List of leaseholders names
  • A list of service charge percentages & due dates,
  • Current arrears balances for each flat,
  • Copies of each lease,
  • Copy of the current insurance policy,
  • Copy of service charge cashbook ledgers since the last set of service charge accounts.
• Exercise your right of access to the building. You should be able to access all common parts in the block.
• Consider who is to undertake the management of the block. Managing a residential block is a considerable responsibility and one that should not be undertaken without a realistic consideration of what is involved.

Property Management after RTM 2

Advisory bodies are agreed that leaseholders should be encouraged to appoint an a Managing Agent initially, even if their long-term aim is to manage the block themselves.

Our 3 suggested ways to manage your block going forward

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Property Management after RTM 3

• The landlord must also fulfil his/her duties as part of the handover:
• The landlord must inform any contractors currently providing services to the block that the Right To Manage is being exercised.
• The landlord must inform the RTM company of any existing contracts concerning the block.

I’m a landlord, download S82 Contractors Notice. £30+VAT

A full and clear picture of the block's accounts must be provided. Any leftover service charge revenue must be transfered to the RTM company on the acquisition date. Before funds are transferred the landlord will need to settle any outstanding bills with contractors. This process may take some time.

For a more detailed description of the RTM timeline view the RTM Flowchart

The Right to Manage Company Duties

From the date of acquisition the RTM company takes over the landlord's responsibilities for the maintenance, repair, collecting service charges and accounting , insurance and overall management of the block.

Existing service charge funds are handed over to the new company while contracts are either transferred or terminated, as appropriate.

After the handover the landlord's position is similar to that of a leaseholder and as such is also a member of the RTM company. Like any other leaseholder in the block he/she may sue the RTM company for bad performance or apply to the FTT.