Does Setting Up Right To Manage Companies Help With Overpriced Service Charges?

Did you know that under new legislation you and your fellow tenants could take away the right to manage your block of flats from your landlord? This could prove to save you a lot of money and give you the control to run your building how you want.

Before contacting a right to manage (RTM) solicitor, it is a good idea to learn a little first about the right to manage flats in general. RTM needs to be under the control of an RTM company which is incorporated with prescribed articles.

Don't get this mixed up with a normal company which has shareholders; right to manage companies are limited by guarantee with all leaseholders occupying the block being entitled to become members with individual liability limited to £1.

Since November 2009 changes in the Law mean right to manage companies only require a single director. However it is recommended that there are three or more on a board of directors.

These directors will not necessarily be leaseholders of the property but to maintain better control, it is a good idea that they have at least some interest or association with the property such as being a relative of one of the residents.

This is all very well, you might think, but what about the lurking hazard of complaint that the procedure is undemocratic. Well it is for this reason that many leaseholders in a block will aim for 2/3rds of tenants to agree to join the new right to manage company before an RTM claim notice can be issued. Unlike the statutory requirement of 50%.

Beyond this, you will need other outside support and definitely a solicitor who specialises in setting up right to manage companies.

A frequent question will be: is this going to be a long, drawn out process that takes years and endless meetings and form filling before being finalised? In other words, is it going to be worth it?

Well, once your RTM company is under formation, the formal procedure for exercising RTM can begin. This begins by serving a statutory claim notice on the freeholder, which your RTM solicitor will do for you.

After this there is a fairly standard route to follow and your right to manage solicitor serves further notices and counter notices.

The process of setting up right manage companies can often be finalised within two months with the right to take over management following three months later.

In order to set up your own RTM company and more information about the whole process, get in touch with a specialist RTM solicitor.


------

Bonallack & Bishop are lawyers specialising in the right to manage flats. For more information on setting up right to manage companies, contact one of their solicitors today. Senior Partner Tim Bishop is responsible for all major strategic decisions at the firm, which he has grown by 1000% in 13 years. Hesees himself as a businessman who owns a law firm.