Right to Manage

Current project status

  • Initiation: Could include discussing scope and terms of reference with lead Government Department
  • Pre-consultation: Could include approaching interest groups and specialists, producing scoping and issues papers, finalising terms of project
  • Consultation: Likely to include consultation events and paper, making provisional proposals for comment
  • Policy development: Will include analysis of consultation responses. Could include further issues papers and consultation on draft Bill
  • Reported: Usually recommendations for law reform but can be advice to government, scoping report or other recommendations

Helping leaseholders take control over the running of their buildings. This project has started.

The problem

The Right to Manage was introduced to give leaseholders control over the management of their buildings.

Leaseholders can set up a Right to Manage company, which can then acquire the landlord’s management functions. Once the transfer occurs, the leaseholders become responsible for things such as collecting and managing the service charge and the upkeep of communal areas.

However, we have been told about numerous problems with the existing law, including:

  • Technical and rigid prescribed notices for the Right to Manage acquisition process;
  • Inflexible eligibility conditions to acquire the Right to Manage, including a requirement for the relevant building to have less than 25% commercial space and the inability for one Right to Manage company to manage multiple blocks on the same estate;
  • Difficulties with managing shared appurtenant property such as access roads and gardens used by other properties on the estate; and
  • Uncertainty of the effect of acquiring the Right to Manage on existing management contracts and practical management difficulties after acquisition of the Right to Manage.

The CMA estimated that there were only 4,000 Right to Manage companies in 2014, with the figure likely to have increased to 6,000 since, out of roughly 4 million leasehold properties. The problems referred to above may be to blame for the limited uptake of this right.

The project

The Government has asked the Law Commission to review the existing Right to Manage legislation with a view to making the procedure simpler, quicker and more flexible, particularly for leaseholders.

Next steps

We intend to publish a consultation paper in January 2019 the end of the year and would encourage all interested parties to respond.

Contact

By email to:   rtm@lawcommission.gov.uk

Project details

Area of law

Commercial and common law

Commissioner

Stephen Lewis