© 2025 News On The Block. All rights reserved.
News on the Block is a trading name of Premier Property Media Ltd.
© 2025 News On The Block. All rights reserved.
News on the Block is a trading name of Premier Property Media Ltd.
Why has Right to Manage failed to take off? It seemed such a breakthrough when the legislation was passed in 2002. Leaseholders can take over the management of their block without having to go through the stress and expense of buying the freehold, and without even having to prove fault on the part of the landlord.
All that's needed is the consent of 50% of your long leaseholders and you can control the destiny of your block.
Yet so far only around 350 RTM companies have been registered at Companies House, and nobody knows how many of those are actually up and running. Peter Haler of LEASE, which gives free advice to leaseholders, is puzzled. "Enquiries on RTM are dropping like a stone, from 6 % in 2004 to 3 % last year," he says. "No-one wants it, no-one's interested, yet RTM is a good thing, the universal panacea for management. We find the lack of interest very disturbing."
It's true the legislation isn't brilliantly drafted. It's unclear, for instance, who should compensate contractors when the RTM company takes over and all existing contracts lapse - sooner or later some block will end up having to clarify this in court. And, although the RTM company is responsible for insuring the building, it is without assets - what compensation is available to leaseholders if it fails to pay the premiums and there's a fire?
But perhaps the main reason RTM hasn't taken off is that leaseholders see it as a half-measure. If you're making all the effort to drum up support - appointing lawyers, arranging residents' meetings, tracing absentees - why not go the whole way and buy the freehold? Although this may involve a hefty investment, your property ceases to be a wasting asset. And you shake off your landlord forever (with RTM, he's entitled to a seat on your board).
Moreover, there's never been a better time to enfranchise. The 2002 legislation abolished the residence qualification that handicapped many heavily sub-let blocks. The number of qualifying leaseholders required has dropped from 60% to 50% (the same as RTM). Landlords now generally accept the inevitability of selling. And regulations promised in the 2002 Act, introducing Right to Enfranchise companies and specifying their procedures, have yet to come in; once they do, enfranchisement will become more difficult again. Peter Haler confirms a rise in enquiries about freehold purchase. Maybe enfranchisement, and not RTM, is that "universal panacea."
Jane Barry, Associate Editor