The Law Commission is consulting on proposed changes that would make it quicker and easier for leaseholders to take control of the day-to-day management of their building.
As things stand, homeowners with long leases over flats can acquire the “right to manage” (RTM), which gives them, rather than their landlord, responsibility for management functions relating to services, repairs, maintenance and insurance. It is a “no-fault” right, so leaseholders can exercise it without having to prove mismanagement by their landlord.
However, the Law Commission says that the current system is seen by many as too technical, slow, restrictive, uncertain and expensive. It has released a consultation paper containing significant proposals for change, inviting the public to respond with their views by 30 April 2019.
Stephen Lewis, commercial and common law commissioner, said: “The ‘right to manage’ process is not working at the moment and change is needed. This is a very practical project, and we’ve been focused on developing proposals that make sure the right to manage is more user-friendly, particularly for leaseholders. We look forward to hearing how the public thinks we can make the process as effective as possible.”
Housing minister Heather Wheeler MP added: “This government is determined to reform the leasehold sector to better support homeowners. This includes making it easier for those who wish to exercise their right to manage and take direct control of their block.
“I welcome the Law Commission’s consultation proposals and encourage all those with an interest to come forward and offer their views.”
The current problems with RTM
The Law Commission says that leaseholders complain that the current process is:
- Too expensive – The leaseholders have to pay most of the landlord’s costs.
- Too technical – Small errors in complying with the procedural requirements can delay the process significantly, and even prevent leaseholders acquiring the RTM.
- Too slow – There are often delays in RTM companies receiving information necessary for them to manage the building effectively, such as the insurance history.
- Too restrictive – The RTM is currently unavailable to owners of leasehold houses (as opposed to flats), those who want the RTM over multiple buildings on an estate, and those whose buildings have more than 25% commercial or other non-residential space.
- Too uncertain – RTM companies often don’t know the extent of the management functions they have become responsible for, particularly in relation to shared property such as gardens and car parks.
Law Commission proposals
The proposals under consultation include:
- Extending the qualifying criteria so that leasehold houses, not just flats, qualify for the RTM.
- Permitting multi-block RTM on estates, and removing the 25% commercial space restriction.
- Reducing the number of notices that leaseholders must serve as part of the claim process.
- Introducing deadlines for procedures and exchanges of information between the landlord and the RTM company, so that the process doesn’t stall.
- Exploring options for a more balanced costs regime.
- Giving the tribunal exclusive jurisdiction over RTM disputes so that it can resolve disputes quickly, and waive minor procedural mistakes made in the process of claiming the RTM.
Click here to view the consultation paper and details of how to respond.
To send feedback, e-mail jess.harrold@egi.co.uk or tweet @estatesgazette
