What Are Your Duties Under Right to Manage?


05/06/2024

Author : Mary-Anne Bowring


Important Duties and Responsibilities

Under the Right to Manage (RTM) legislation in England and Wales, the leaseholders within qualifying blocks of flats can collectively take over the management of their building from their freeholder. This is without proving any fault on their part. As a participating member of an RTM company you will have numerous duties and responsibilities:

1. Formation of the RTM Company:

- Firstly you will need to establish and register a private company, limited by guarantee, with Companies House.

- You then need to ensure that the company's articles of association comply with all of the statutory requirements.

2. Eligibility and Participation:

- To be eligible to form an RTM your building must be self-contained, with at least two flats. At least two-thirds of the flats must be held by qualifying tenants. This may be subject to change under future legislation.

- You also need to have at least 50% of the owners in the building support the RTM claim. This may also be subject to change.

3. Serving Notices:

- Serve a Notice of Invitation to Participate on all qualifying tenants.

- Serve a Notice of Claim on the freeholder, setting out the residents intention to acquire the right to manage.

Further Duties

4. Management Duties:

- Take over all of the management functions that were previously carried out by the Freeholder or his agent. This includes maintenance, repairs and the provision of services.

- Budget for, collect and manage the service charges. These are used to pay for the management and upkeep of the building.

- Make sure that the RTM complies fully with all of the relevant Health and Safety regulations and maintain the necessary insurance for the building.

5. Financial Management:

- Manage accurate financial records and ensure transparency in accounting for service charges and other funds.

- Prepare annual budgets and accounts, and distribute these to leaseholders. Submit these to the HMRC when required.

6. Communication:

- Encourage open and effective communication with all fellow leaseholders, whether on the operating committee or not. You should provide regular updates on management activities, budgets and any other relevant and significant issues.

- Organise and hold meetings. This should include Annual General Meetings (AGMs). All residents must have an opportunity to discuss management issues and to make collective decisions.

More Duties

7. Legal and Regulatory Compliance:

- Make certain that all of the residents understand their lease terms and any relevant legislation. This will include landlord and tenant law, health and safety regulations and company law.

- Handle disputes and complaints in accordance with established procedures and seek legal advice where and when necessary.

8. Maintenance and Repairs:

- Arrange and oversee necessary maintenance and repairs to keep the building in good condition.

- Where necessary, obtain competitive quotes and select contractors for repair and maintenance work.

Practical Steps and Best Practices

- Engage Professionals: Consider hiring professional managing agents, solicitors and accountants to assist with complex aspects of building management and legal compliance. www.servicechargesorted.co.uk can provide all of these service for a low annual fixed cost.

- Training and Education: Keep up to date with all leasehold management and RTM legislation by attending regular training courses and workshops.

- Frequent Inspections: You will need to conduct regular inspections of the property in order to identify and address maintenance issues promptly. Make sure that these are logged.

- Emergency Procedures: Identify and create clear procedures for handling emergencies and ensure that all residents are aware of what needs to be done.

To Conclude

As you can see, there are an awful lot of responsibilities allied to establishing and then maintaining an RTM. www.servicechargesorted.co.uk can help right from even the initial thoughts about taking control, all the way through to the day to day running of the RTM Company. This applies no matter how small the size of your apartment block. All of this for a low annual fixed fee.

Please don’t hesitate to get in contact with us. We look forward to hearing from you.

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