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. We published our report on the right to manage (“Leasehold home ownership: exercising the right to manage”) on 21 July 2020.

Download the full report on the right to manage.

Download the summary of the report on the right to manage.

Other documents relating to the project are available from the drop-down menus at the bottom of this page.

We also published our reports on enfranchisement (“Leasehold home ownership: buying your freehold or extending your lease”) and commonhold (“Reinvigorating commonhold: the alternative to leasehold ownership”) on 21 July 2020.

The page for the enfranchisement project may be found here.

The page for the commonhold project may be found here.

Summary: The future of home ownership: download our summary of all three residential leasehold and commonhold reports and how they fit with Government’s own reforms.

At a glance: the future of home ownership: download our short “at a glance” summary of the future of home ownership.

In more detail: the future of home ownership: download our introductory chapter to all three reports, which explains how our reports fit with Government’s own reforms, and sets out the future of home ownership after reform.

The problem

The right to manage (“RTM”) was introduced in 2002 to give leaseholders the ability to take over the landlord’s management functions in respect of their building, without having to buy the freehold. It is a “no-fault” right, which leaseholders can exercise without the need to prove a complaint against their landlord or managing agent.

The Commonhold and Leasehold Reform Act 2002 sets out what was intended to be a simple process, beginning with the leaseholders setting up a dedicated “RTM company” of which the leaseholders are members. If the RTM is claimed successfully, the leaseholders, through the RTM company, take control of services, repairs, maintenance, improvements, and insurance in respect of their building.

However, stakeholders told us about numerous problems with the existing RTM regime, including:

• unpredictable and sometimes excessive costs of claiming the RTM, particularly as the RTM company is liable for the landlord’s costs as well as its own;
• restrictive qualifying criteria meaning it is not possible to claim the RTM in respect of multiple blocks on an estate, buildings with more than 25% non-residential space, or leasehold houses;
• information about the building and management functions being provided to the RTM company too late in the process, so that the leaseholders cannot always make informed decisions about claiming the RTM or prepare for an efficient handover of management functions; and
• uncertainty as to how the RTM applies to areas which are shared with other buildings, such as gardens and car parks.

Government asked us to review the existing legislation with a view to making the RTM procedure simpler, quicker and more flexible, particularly for leaseholders.

Report

We published our final report on 21 July 2020. We are confident that the recommendations we are making will bring about significant benefits. In particular, they will:

• reduce the costs of making an RTM claim, and give leaseholders more control over those costs;
• make the RTM available to more leaseholders in a wider variety of buildings; and
• make the process of claiming the RTM less complicated and less likely to be frustrated because of small procedural errors.

Contact

By email to: propertyandtrust@lawcommission.gov.uk