Right to Manage - Leaseholds

Leaseholders now have the right to wrest control of their building from unscrupulous landlords.

We outline the changes - and explains how the system will work.

As a leaseholder, what new rights do I have?

From 2003, disgruntled leaseholders will have the right to take over the management of their building, under new "Right to Manage" (RTM) rules.

The measures mean leaseholders can take decisions about the upkeep and management of their flats, without having to buy the property's freehold.

The new system will not only help people suffering from bad landlords, but is designed to "empower" leaseholders who want more control in the running of their building.

Anyone who meets the entry qualifications can apply - and there is no requirement to prove any wrongdoing by your landlord or pay compensation.

The advantage of RTM is that leaseholders can gain better control over the level of service charges set, can appoint their own choice of managing agents - and select their own insurers.

How to set up an RTM

Leaseholders must get together and set up an RTM company with a special Memorandum and Articles of Association. They are then required to serve a formal notice on their landlord.

The building must meet certain conditions and a minimum number of leaseholders is required to take part. For example, qualifying buildings must include at least two flats, and at least two-thirds of the flats must be let to 'qualifying tenants', whose lease was originally granted for an original term of more than 21 years.

The number of qualifying tenants must be equal to at least half the total number of flats in the building.

My landlord isn't going to like this, can he block it?

Your landlord can dispute the claim, but only on a number of rather limited grounds, and if this process ends in stalemate, both parties can settle the matter through a tribunal.

If they withdraw their claim or lose their case at the tribunal, they will be liable for any reasonable costs incurred by the landlord.

These include the landlord's legal expenses, accountancy and audit costs, although the exact payment can be determined through an additional tribunal hearing.

Will every tenant be able to take advantage of the new rules?

While the rules could be a big help to people who are fed up with their landlord, some will miss out.

Setting up an RTM can involve buildings which are part-commercial. However, the non-residential part must not exceed 25% of the total floor area to qualify.

In essence, this means residents in blocks which are more than one quarter commercial will not have the right to manage their own affairs.

Will there be any further reforms?

The measures are part of a rolling programme of leasehold reforms which will stretch into next year.

The Commonhold and Leasehold Reform Act 2002, in which the new reforms are enshrined, is aimed at improving the rights of leaseholders and tenants in the UK.

What if I am getting a raw deal from my landlord but am not eligible for an RTM?

You will be given more rights to challenge service charges and administration costs. Landlords must consult leaseholders before they sign a contract for more than a year, for example, for lift maintenance or security.

Improvement costs and administrative charges must now be "reasonable" and can be challenged at a Leasehold Valuation Tribunal.