Taking on the Right to Manage (RTM) can feel empowering – finally, leaseholders get control over how their block is run. But with that control comes responsibility, and sometimes confusion. One common mistake is assuming that RTM company costs, like filing accounts, paying for a company secretary, or buying Directors and Officers (D&O) insurance, can be paid from the service charge. The truth? They can’t. In this blog, we’ll explain why, what the law says, and what RTM directors need to know to stay on the right side of the rules.
15 Read More
If you’re a director of a Right to Manage (RTM) company, you already know it’s not always easy. The idea sounds great – leaseholders take control of their block, no more dealing with an unresponsive freeholder, or managing agent who can’t seem to be bothered. The attractiveness of right to manage is that decisions stay in the hands of the people who actually live there. But the reality? Collecting service charges, balancing the books, chasing payments, and organising repairs can be overwhelming. The good news is you don’t have to do it all alone. In this blog, we’ll look at the struggles RTM directors face and why using expert support like ServiceChargeSorted.co.uk can take the stress away.
So, you and your neighbours have claimed the Right to Manage (RTM). Great news – you’re now in charge of running your block. But here’s where things can get confusing: accounts. Leaseholders often ask why they’re given service charge accounts and RTM company accounts – aren’t they the same thing? The short answer is no. They cover different things, serve different purposes, and even go to different places. In this blog, we’ll break down the difference in plain English, explain why two sets of accounts are needed, and help you understand who sees what.
For freehold management companies (ManCos) and resident directors, service charge arrears are one of the biggest headaches. Without service charges, the block can’t function – no cleaning, no insurance, no repairs. So, when leaseholders don’t pay, the ManCo has to act. But here’s the tricky part: what’s the right route to recover the money? Do you go for forfeiture, which is the nuclear option, or take the county court route to get a money judgment? In this blog, we’ll break down the options, explain the risks, and help directors understand what works best in practice.
If you own a flat, chances are you’ve heard people comparing service charges on a ‘per square foot’ basis. It sounds simple: divide the total charge by the size of the flat and compare with another building. But is it really that straightforward? In reality, service charges depend on all sorts of things – the age of the building, whether there’s a lift, how much staff are on site, the size of gardens, the level of amenities, and the insurance costs. In this blog, we’ll look at who actually publishes figures on service charges, whether per-square-foot comparisons are useful, and what leaseholders should keep in mind before jumping to conclusions.
One of the golden rules of leasehold law is simple: service charges are not for profit. They exist to cover the costs of running and maintaining the building – no more, no less. If more is spent than budgeted, then a balancing charge has to be collected, section 27 of the landlord and tenant act says so, and similarly if less is spent than budgeted a credit has to be applied. This way service charges are not for profit as the balancing charge equalises the fund. That said, reserve funds, where permitted by the lease can be retained and show on the balance sheet of the service charge accounts.
Every year, leaseholders across the UK wait nervously for the new service charge budget. It’s common to hear people ask: ‘What’s a reasonable annual rise – maybe inflation?’ But is that really the right way to think about it? The truth is, service charges aren’t like rent or a subscription fee that simply goes up by a set percentage. They’re based on real costs: the cleaning contract, the gardener’s bill, the insurance premium, the electricity for the hallways. In this blog, we’ll explore why simply indexing charges to inflation isn’t the answer, what directors of management companies should be doing instead, and how leaseholders can tell if their service charges are fair.
If you own a flat in the UK, you’ve probably come across the terms service charge, reserve fund, and sinking fund. They can sound like jargon, and many leaseholders wonder what the real differences are. In fact, these funds are closely linked, but each has its own purpose. In this blog, we’ll explain them in plain English, show where they overlap, and help you understand why they matter for the smooth running of your block.
19 Read More
If you live in a block of flats with a freehold company, you probably also own a share in that company. You may have bought your flat with a share of the freehold, been part of the original freehold purchase group or bought a lease extension with freehold share or simply a freehold share later on.
Becoming a director of a Right to Manage (RTM) company can feel exciting. You and your neighbours finally have control over how your block is run. But here’s the catch – it only works if you can collect the service charge. Without that money, there’s no budget for cleaning, insurance, repairs, or even the electricity in the hallway. In this blog, we’ll walk through the essentials every new RTM director needs to know about service charges, with practical tips to help avoid common pitfalls.
