Implications Of Setting Up A Right To Manage Company - By: Tim Bishop

For a while you have been unhappy at the way your landlord manages your block of flats. When you speak with some of the other tenants sharing the block, they have the same thoughts. Services are not good and you are paying a ridiculously high fee.

One of the tenants suggests consulting a specialist solicitor with a view to forming a right to manage company and over the management yourselves.

This sounds like a brilliant idea. However, before you do, taking over the management will impose important responsibilities so get wise to some of these before consulting a lawyer about exercising your right to manage leasehold property.

Some of the issues to think about when considering right to manage (often called RTM) are:

- the leaseholders must manage the building via a right to manage company which means understanding legal procedures for company formation.

- the leaseholders - who will then have the role of officer of the new right to manage company - must wish to be involved for the long haul.

- these officially designated people will consist of directors, a chairman and company secretary; they will have usual duties expected of company directors, and landlords.

- the right to manage company must be open to and available for critical comment from remaining leaseholders in the same way as the landlord has been.

- regular meetings must be held to keep company communications up to date.

- bookkeeping, accounts, legal requirements and other essential criteria must be checked.

- prompt payment of charges by leaseholders is essential to maintain solvency of the RTM company.

- any problems or conflicts between fellow leaseholders must be handled correctly.

- compliance with various company, housing, health and safety laws must be met.

- knowledge of the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE). This is to protect the rights of employees when a transfer situation arises.

Obviously, you solicitor will explain things properly, help and support you. It's a good idea to search for a specialist RTM lawyer who has plenty of experience of this aspect of Law and can give the right advice for a hassle-free process.

The right to manage is a positive opportunity for tenants (the leaseholders) who actually own most of the value in the building to control their own affairs. They will be directly involved in decision-making about the management and maintenance of their flats. Imagine how good it will feel when your service charges fall and yet you find you have vastly improved service!

About the Author

Bonallack & Bishop are lawyers specialising in forming a right to manage company. For more information on the right to manage leasehold property then conctact them today. Senior Partner Tim Bishop is responsible for all major strategic decisions at the firm, which he has grown by 1000% in 13 years.

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