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Last Updated: Monday, 3 October 2005, 14:28 GMT 15:28 UK
Q&A: Leaseholder rights
A house
Leaseholders can take over the management of their building
Leaseholders now have the right to wrest control of their building from landlords. BBC News outlines the changes - and explains how the system will work.

As a leaseholder, what rights do I have?

Disgruntled leaseholders have the right to take over the management of their building, under "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 system helps people suffering from bad landlords and 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.

Sounds good, how do I go about setting up an RTM?

Leaseholders must get together and set up an RTM company.

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.

People considering an RTM must remember there are costs involved.

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.

The Leaseholder Advisory Service (Lease) has a free and detailed guide to RTM, available on its website (see link on right).

The Association of Managing Agents (Arma) also has some information on the legislation (see link on right).

Will every tenant be able to take advantage of the RTM 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.

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

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

In future landlords must consult leaseholders before they sign a contract for more than a year, for example, for lift maintenance or security.

Are there any alternatives for people excluded from setting up an RTM?

In 2004 the government introduced a new right to "commonhold".

Under a commonhold system, there is no landlord, and every resident or "unit holder" in the property will have equal rights.

For people excluded from the new RTM companies, the commonhold agreements could be a welcome introduction.

There will be no restrictions on the commercial and residential mix in blocks to qualify.

According to the Department for Constitutional Affairs it is simpler to administer and set up than a RTM.

But converting from a leasehold block to one owned by commonhold will require the participation of all the leaseholders.




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