Right to Manage (RTM) is a good opportunity for long leaseholders to obtain control of the maintenance of the public parts of their block. However, it is crucial to think about what will take place once they have successfully undertaken the process.
We won’t explain the procedure for undertaking a Right To Manage procedure at this point but we will presume that the reader is in possession of this upbringing. Rather, we will consider the elements to consider after the RTM entity has jurisdiction over the block of flats’ management.
When leaseholders have obtained consent to acquire the Right to Manage, they generally have more or less three months in which to prepare for handover ahead of the acquisition date. Meanwhile the big decision is with reference to who might in reality undertake the management. There are 3 options: – manage the property directly – however this could be a major undertaking in the event that the block is in excess of about three or four properties, or there are differing opinions of individuals – retain your current managing agent – appoint a fresh managing agent, which one might suggest ought to be a member of ARMA or retain some kind of affiliation with an expert entity
The directors as well as residents should talk about the degree of service required and the frequency of activities such as cleaning and general repair.
A Section 93 information request to the landlord will bring to light all the critical data associated with the development. This makes sure that leaseholders have at hand any important information with which to run the block of flats when the process is completed.
The newly appointed contractors should be lined up plus the block insurance would need arranging, making sure cover is continuous from the preceding cover immediately from the time of take over.
It is worth noting that the landlord is required to give up all unspent service charge money upon the Right to Manage acquisition day or as soon as practically possible thereafter.
In most instances the employment of your caretaker would be governed by the Transfer of Undertakings and Employment Regulations (TUPE) and he or she would not automatically transfer across to the RTM company or the new managing agent you appoint. It would be rare that the caretaker might not want to continue in place but there may be grievances which need to be sorted out. Their contract might stop on the acquisition date and will need to be renegotiated. It is strongly advised that those involved in RTM take good quality legal advice.
As part of this procedure it is valuable to produce a thorough action plan as well as set a list of priorities and to pre-arrange frequent meetings with the newly appointed directors for the first few months. Lessees should hold their own regular meetings with the RTM directors so they are properly briefed and they can correctly instruct the newly appointed managing agent, when one is appointed. It is a good idea for the residents with the support of their managing agent to hand out a newsletter explaining how the maintenance will now work and who are the points of contact.
Property management companies strongly recommends that you buy copies of all Counterpart Leases. The participants should also agree roles along with expectations with the new directors.
Gaining the Right To Manage is a complex procedure but one that is nearly surefire to succeed and is comparatively economical. But, the years after the new company is established possibly will throw together fellow lessees in a way that they were not before. It is often a bonus that people now work together and know each other. In the same way, it can be the start of numerous arguments over the distribution of responsibilities, allocation of expenses as well as workloads in addition to decisions over strategic priorities. The work done in the early weeks can lay the foundations for a cordial relationship between leaseholders and the directors of the RTM company so it is worth planning ahead even before the RTM process is completed.