The leaseholders’ Right to Manage

In spite of this legislative light at the end of a tunnel of sheer frustration, the vast majority of flat owners suffering nationwide have failed to take up the RTM. Having waited for years, the leaseholders’ disempowerment continues. 

Companies like Jordans have made the statutory formation relatively straightforward, however it does not provide the platform on which to gather support and see the process through to a change in management control. The legislation is clear and simple, the costs are minimal, the procedure is straightforward and the benefits are great. So why have only 800 RTM companies been set up to date?  

The most logical reasons are time and money. To the layman, the RTM process can be overwhelming, time consuming and strewn with stumbling blocks.   The pioneers for change may well find themselves shelling out for the statutory paperwork, payment of landlord’s legal fees, searches of the land registry to ascertain qualifying tenants, any professional advice sought and sundry mailing costs (albeit that these can be recovered from the service charge upon successful outcome). 

The Right To Manage, once acquired, transfers the responsibility for providing adequate insurance cover, sourcing contractors for communal repairs, serving proper statutory notices; collecting funds for major works, budgeting, reserve funds, provision of services, sourcing and paying contractors, compliance with the lease and a duty of care to the block and other leaseholders… the list goes on. The RTM Company must face the additional responsibilities, duties and liabilities previously shouldered (sometimes at a great cost) by the Landlord. 

Perhaps this brings in another reason for low take-up: fear. Fear of the unknown; of upsetting the status quo; of responsibility and commitment; of failure and in some cases - fear of having to face neighbours who refuse to carpet their floors, play loud music at night, abuse parking regulations, sublet to undesirables in multiple occupation and even refuse to pay their service charge! 

Delegate the process

The responsibility cannot be underestimated and need not be overwhelming but it does make sense to delegate the process to professionals. Parkgate-Aspen Property Management have been serving leaseholders and landlords alike for 30 years. At the conception of the legislation, Parkgate Aspen established a specialist department to provide a “one-stop RTM shop” (soon to be relaunched as “remove-a-landlord.com”). This service gives guidance and support to blocks wishing to exercise their rights through their RTM process - from initial company formation, processing of statutory paperwork, dealing with invitations to join the RTM, monitoring response; reporting to the board and responding to queries at residents’ meetings right through to establishing a new management regime. Where AGMs are traditionally poorly attended and generally apathetic, RTM meetings are often bursting at the seams as leaseholders are enrolled in the possibility that things can and will get better.

Managing director, Sol Unsdorfer, says “RTM may not be a “miracle cure” but it has a voice which the industry has to listen to. The newly formed company will choose how it wishes to be run and will demand a high quality of service - they are not going to be fobbed off. This legislation is in their best financial interest”. 

 With Parkgate’s procedures tried and tested, blocks have taken over the management in around six months - even allowing for the termination of contract with the existing agents (obviously this can vary).    All but one of the RTM companies set up by Parkgate-Aspen have appointed them as managing agents. 

The right is there. But when exercising these rights from formation to management it is fair to say that the physical, financial, legal and sometimes emotional demands (particularly with larger blocks) are still best left to the professionals. 

Danny Weil is a manager at Parkgate-Aspen Property Management

Tel 020 8732 8924.