Time For Action

Every time you get your service charge bill you feel slightly annoyed and frustrated by it, as you really can’t see where the money is going.  The building isn’t particularly clean and you’ve asked the freeholder three times to fix the front steps.  Yet somehow, every time you pay the bill, you put it to one side and put a lid on your resentment. After all, the freeholder is in charge and there doesn’t seem to be a lot to do about it. You simply don’t have the time or the energy to enter into a dispute with them...

Does that sound familiar? If so, you may not have heard of your Right to Manage your building, along with other leaseholders. Under this right, you have the ability to set up an RTM company which takes over the management responsibilities from the freeholder.  The main factor that makes it so appealing, is that it is a right, and as such your freeholder cannot challenge it (apart from in limited circumstances, which we always check at the outset). The application is a process, that is all, and no dispute is involved. In fact, you don’t even need to be dissatisfied with your freeholder to apply, although of course it is often dissatisfaction with their service that leads leaseholders down the RTM path. 

One thing to point out that is not always clear is that this does not force you to do all the work yourselves; on a day-to-day basis- the RTM company can, and usually does, appoint a managing agent to run matters. 

The benefits of Right to Manage are significant, especially where a building is being managed badly, or at too high a cost. RTM ensures that the leaseholders’ concerns are prioritised. This means that the people who are most affected by the management are the ones who direct it and their specific issues arising from living in the building can be addressed. Even a diligent freeholder, especially one who owns more than one building, is not going to have the same understanding of some of the issues as the owners and residents. 

As all leaseholders can become members of the RTM company, they have a say in the appointment of the managing agent, and indeed changing managing agent if they fail to perform. A freeholder will not necessarily have your best interests at heart, and being a member of the RTM company provides a line of direct accountability to the leaseholders. Those who wish to be more involved can also choose to become a volunteer director.  

Right to Manage is very cost efficient. Application and set-up costs are limited, and there is no premium payable to the freeholder, unlike in the case of a freehold purchase or lease extension.  One of the main reasons that leaseholders are frustrated by their freeholder’s management of a building is the sense of spiralling costs and a lack of value for money. By using an RTM company, leaseholders are able to set service charges at a reasonable level and achieve better value for money from contractors. There can be more transparency - even where repairs or maintenance are by their nature expensive a sense of ownership of those costs will make a huge difference to how you and your neighbours feel when you make the payment.