Radical change to leasehold and Right To Manage urged by Law Commission

Consultation closes today on a Law Commission proposal to radically reshape leasehold and the Right To Manage.

Right To Manage was introduced to give leaseholders control over the management of their buildings; leaseholders can set up a RTM company, which can acquire the landlord’s management functions. 

Once the transfer occurs, the leaseholders become responsible for things such as collecting and managing service charges and the upkeep of communal areas - but the Law Commission says there are numerous problems with the regulations as they stand.

These include restrictive criteria, such as the inability of a a Right To Manage company to manage multiple blocks, the exclusion of premises where more than 25 per cent of space is given over to non-residential purposes, and the exclusion of leasehold houses.

Other complaints raised historically by the Law Commission include the length and cost of rectifying small errors by leaseholders, and uncertainty on exactly what powers transfer to RTM companies - especially gardens, open spaces and car parks shared with other buildings.

The Law Commission say it’s likely there are only 6,000 Right To Manage companies out of around four million leasehold properties.

Now it is advocating radical change - and that’s the subject of the consultation ending today. It wants:

- relaxation of the qualifying criteria so that leasehold houses, and buildings with more than 25% non-residential space, could qualify for RTM;

- permitting multi-building RTM on estates;

- reducing the number of notices that leaseholders must serve, and giving the tribunal the power to waive procedural mistakes;

- establishing clearer rules for the transfer of information about management functions, and for the management of property which is not exclusive to the premises claiming the RTM; and

- requiring each party to bear its own costs of any tribunal action, and exploring options for the landlord’s non-litigation costs.

After today the Law Commission says it will analyse all responses and publish its recommendations to government in a final report.