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Right to manage claims are generally unwanted for landlords in that not only is management being taken over by what is a collective of ‘lay people’ in terms of property management, but the valuable income that comes through insurance arrangements and the granting of consents (for alterations, sub-letting, to name a couple of examples) would be lost.
Right to manage claims have been subject to a vast array of litigation over the years based on disputes over a claim’s validity. This highlights the extent to which right to manage claims have been improperly brought or commenced without the eligibility requirements being met in full.
It is therefore highly recommended that right to manage claims are fully scrutinised with the benefit of specialist legal advice to ensure that only valid claims proceed. Landlords have the right to either admit or deny claims via the service of a counter-notice and if the dispute persists then an application to a Tribunal will be required.
What are the criteria for exercising the right to manage?
There are key criteria for exercising the right to manage.
Determining whether the eligibility for a claim exists requires careful consideration with the assistance of expert legal advice before the process is embarked upon. If any of the eligibility criteria are not met then the claim can be opposed and this can descend into litigation before a Tribunal.
The criteria are:
- The building or premises itself must:
- consist of the whole of a self-contained building i.e. it is structurally detached; or
- a self-contained part of a building i.e. it is capable of being redeveloped independently from the remainder of the semi-detached building and can have services provided to it independently from the remainder of the building without significant disruption
- be the only building included in the claim – acquisition of the right to manage cannot be made in respect of multiple blocks within a single claim by a single right to manage company
- The premises must not be ‘excluded’ by the legislation. For instance:
- More than 25% of its internal floor area cannot be occupied or intended to be occupied for non-residential purposes. This is often a factor where buildings have ground-floor commercial units
- The premises must contain at least two flats held by ‘qualifying tenants’. This simply requires a leaseholder to hold a lease with more than 21 years left on its term.
- At least two-thirds of the flats in the premises must be held by ‘qualifying tenants’
- The claim must be made by a group of qualifying tenants that collectively hold not less than one half of the total number of flats in the premises
PDC Conveyancing can provide full advice and assistance in assessing the eligibility of your claim so that you can begin the process with confidence.
What is the process involved?
Please click on our flowchart that sets out the basic steps involved in the statutory lease extension process.
What will it cost me?
Under the legislation, the right to manage company will be liable for the landlord’s costs that it incurs in connection with the claim from the date the notice of claim is served, whether or not the claim is admitted.
Our fees are charged at an hourly rate, see our costs. Our costs will be billed at the end of the matter and we will seek to recover them from the RTM company direct. Should the matter become contentious we will discuss a cost estimate with you.
If you are a landlord and interested in learning more then please contact our Dominic Cassidy of our Business Development Team for further information: email@example.com