If you’re a leaseholder of a residential property with a landlord or management company looking after the communal areas, for example a block of flats, then there’s a neat little remedy to force them to manage things correctly or not at all.
When you’re at the receiving end of escalating service charge demands and poor service, it can seem like the landlord always has the upper hand, whereas in actual fact there are a whole host of legal rights that leaseholders of residential properties can use through their leases and general legislation.
These are generally for long leases where the gist is that you effectively own your property rather than have just short-term lets, and with it being people’s homes then some useful protection for them.
Selecting the Right Angle
So this particular right comes under the Landlord & Tenant Act 1987 and allows you to insist upon either the owner directly to manage things correctly, or to instruct a managing agent to do so. This may be with the freeholder directly, or sometimes with a management company that takes on the role of a landlord in the leases.
But before launching down this route, look at other options first, the most obvious one being simple dialogue with the owner. By clearly expressing your dissatisfaction with the service, and by just mentioning legal routes like this and showing that you mean business, can get landlord’s knees trembling and begin sensible communication without having the cost and hassle of going down their particular route.
Often a landlord is more bothered about the ground rent income going forward and has just farmed out the management and service charge to an external managing agent to deal with and therefore happy to look at changing this for an easier life.
There may be other legal options like forming a legal Residents Association, or the popular route of a RTM Right To Manage company. In short, RTM is where you go a stage further and actually set up a whole new company to take over management duties from the landlord longer term, and although it is more complex and involved needing at least half of the leaseholders on board, it is more of an automatic process that a landlord can’t refuse.
Going for the Appointment of a Manager
However after looking at the options of how to deal with the landlord, if you decide to implement this right to appoint a new manager, then here are the three key stages to this (check out more technical detail here at Lease Advice and here at a firm of solicitors).
1. Serve a Preliminary Notice
So begin by serving a set notice to the landlord asking them to shape up or change the management arrangements.
Now although you don’t need a minimum of 50% of the leaseholders to agree to this, it isn’t an automatic right of change here, so in effect you’re providing them the opportunity to first improve before a third party then makes a decision to change.
There’s an example notice here, which will need to be served on the official landlord who has the management duties, which may be multiple ones like the freeholder and a management company, although it excludes an existing managing agent which is instructed by them and does not have a direct obligation through your lease. (This can be helpful if you want to address the issue with the owner without involving the current managing agent as of yet, or you may want to deliberately copy them in anyway in order to make crystal clear that you’re taking action).
Once served, you then need to give a reasonable amount of time for them to take reasonable measures to get their act together with better management services and charges.
2. Apply to the First Tier Tribunal
If there’s no changes, then the next stage is to apply to the First Tier Tribunal to assess the situation and determine whether it’s fair for them to appoint a new manager and/or receiver over the property.
In addition to requiring clear information on why the change is needed, you’ll also need to provide a proposed new basis of managing, whether directly by the leaseholders in some form, or by a new managing agent. Ideally have a specific agent on standby and ready with a proposal, as they can help identify the issues and demonstrate to the Tribunal that they are safe and capable hands to take over.
3. Implement an Order of Appointment
If you have a successful case, the Tribunal will issue an Order of Appointment for a new manager, stating how this is to take effect and what specific management functions they now have.
Over time the current landlord will need to play ball and hand over necessary documents and accounts for the new one to begin taking over.
Taking Over the Management
This legal right for residential long leasehold owners to require the landlord to change the way they manage the communal areas and service charge can be a great help to getting things back on track at the property.
Although it doesn’t need all the leaseholders on board and takes on little responsibility directly, you need to remember that it is not an automatic right, but more a right to request the landlord to get things correct of their own accord or bring in a Tribunal to change things.
Therefore it may be worth looking at other options first, the main one being a RTM company which is more automatic but taking more involvement on lots of levels.
Or even if you don’t intend to follow this through, it can be at least threatened in order to sensibly agree changes on the back of it, or failing this then begin involving solicitors and the appointment-of-a-manager ball rolling.
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