Right to Manage

Pros and Cons of Right to Manage

Pros

  • Management control of the property without application to Court and without accusations of blame. This means:
  1. No more excessive services charges, including over-inflated buildings insurance fees.
  2. No more neglect or, conversely, unwarranted scheduled work.
  3. No more management charges.
  • Exercising your Right to Manage will not incur any payment of compensation to the Freeholder (although the Freeholder is entitled to any costs he has incurred in the RTM process).
  • Taking control of the property will require you to form a RTM Company. A company directorship will enhance your Curriculum Vitae.
  • As a leaseholder you are entitled to become an RTM director and you will have equal voting powers to the other Leaseholders. The RTM voting system is fair and determined by majority vote.

Cons

  • Running an RTM will take time and may involve managerial responsibilities. A cooperative attitude is generally required between the participating leaseholders for the process to be effective and dispute-free. Take the self-management test to determine if this will be right for you. An alternative would be to transfer management of the property to an alternative independent managing agency.
  • Some Leaseholders will be required to become company directors subject to the minimal requirements of Companies House.
  • Even if an individual Leaseholder does not wish to participate in the RTM company, they will still be able to comment on the issues surrounding the property under current legislation.
  • The Freeholder is entitled to become a Company director with one vote per flat that they own in the building.
  • You will be responsible for the Freeholder's reasonable professional fees in responding to the RTM proposal.
  • Managerial handover from Freeholder to RTM may leave a period of uncertainty where works contracts are underway but responsibilities remain unassumed.