The Commonhold and Leasehold Reform Act 2002 gives tenants of blocks of flats the collective right to take over the management of their building from the landlord without having to acquire the freehold. This right can be claimed out of court, is irrespective of fault on the part of the landlord, and no compensation is payable.
For this purpose, the building must be a self-contained block of flats. It must have no more than 25% non-residential use (ie the internal floor area of any non-residential part(s) must not exceed 25% of the whole internal floor area), and two thirds of the flats must be let to qualifying tenants.
This right to manage can only be exercised through membership of a right to manage company. It can be protected by registering a notice against the landlord’s title.
Please could you let me know which stage in the process has been reached? For example, has a notice of invitation to participate been served on every qualifying tenant who is not already a member of the company and who has not already agreed to become a member? The notice of invitation to participate must be served at least 14 days before the RTM company serves the claim notice on the landlord.
Has the RTM company served the notice of claim on the landlord(s) of the premises, any third party to any of the flat leases (eg a guarantor) and any manager of the premises who has been appointed under Landlord and Tenant Act 1987, Part 2? A copy of the claim notice must be served by the RTM company on every qualifying tenant.
Has the landlord served a counter-notice which admits or disputes the claim before the deadline specified in the claim notice (which must give the landlord at least one month to respond)? The landlord can only dispute the claim if the building does not qualify, the RTM company does not satisfy the statutory requirements or the RTM company members do not represent half the flats in the building.
If the RTM company does not agree with the grounds of opposition, it must apply to the First-tier Tribunal (Property Chamber) in England to determine the validity of its claim. The application must be made within two months of the date of the counter-notice. If the application is not made within this time, the claim is deemed to be withdrawn.
Has the claim been accepted or determined to be valid? If so management of the building transfers to the RTM company on the ‘acquisition date’. This will be the date specified in the notice of claim (if the claim is accepted), three months after any determination becomes final or three months after any agreement accepting the validity of a claim which was originally disputed.