How to avoid your Right to Manage claim being rejected

Technically there is no need for leaseholders to prove mismanagement by a landlord. The right to manage is available, whether the landlord’s management has been good, bad or indifferent. But let us face facts, the only real reason for leaseholders replacing their management company is because they are not happy with the current situation. Often, there is history of mis-management or service charge complaints – and so the Right To Manage process can be somewhat adversarial. Usually, freeholders have a vested interest in retaining the current management set-up, and are reluctant to see any income streams disappear. Here, a freeholder may seek to disallow an RTM claim from your block. The freeholder will pass a new RTM Claim to their solicitors to carefully scrutinise the applicant’s procedure to look for a reason to reject the claim. So it is very important not to overlook any aspect of the Claim procedure. Although the procedure is well defined, there are still many ways a Claim can be rejected. Many disputed cases are decided by a Leasehold Valuation Tribunal (LVT). Some of these reasons for rejection include: A Claim Notice not given to a landlord of the whole or part of the premises Less than two thirds of the flats are held by qualifying tenants Having less than 50% of owners being proven members of the RTM company Not keeping the member’s register correctly updated at the correct location. Insufficient documentation to prove the members are qualifying tenants Incorrect RTM company formation – not limited by guarantee, incorrect Memorandum of Association, no incorporation certificate Having more than 25% commercial space in the building (anything close to this number is likely to be disputed and require detailed surveyor measurements) The date for a Counter Notice being insufficiently long Non-participants not being served the correctly worded invitation to join in the RTM Non-participants not having access to the required RTM company documentation Non-participants not receiving enough time to respond No proof of RTM members receiving copies of the RTM Claim In addition there are other, less common issues with RTM Claims. Needless to say, it is important to follow the RTM procedure to the letter, and to try and forestall any potential counter Claims. However don’t let the cautionary tone of this article discourage you from taking action to replace a poor management company. The good news is that if the ‘i’s are dotted, and the ‘t’s all crossed, then your RTM takeover is only a matter of four months away.

 

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