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Right to Manage – Frequently Asked Questions

What is the Right to Manage?

It is a right that enables leaseholders to take over the management of their building. Brought in through the Common and Leasehold Reform Act 2002. To exercise this right a Right to Manage Company needs to be set up first. There doesn’t have to be a question of fault by either the landlord or the property manager. The Right to Manage Company assumes full management responsibility for the building. Its members are free to appoint a property manager of their own.

What is the purpose of the Right to Manage?

The main reason for it is to put the power and control back in the leaseholder’s hands. It enables them to set the standards of their block, managing it themselves. Also, they can ensure that they are getting value for money with their outgoings.

Do iInsure365 pay commission to any managing agents?

iInsure365 do not pay any commission to managing agents for any part of our insurance. We do receive a commission in relation to the insurance we provide which we are happy to disclose. iInsure365 are a completely open and transparent business. We will work hard to ensure that your annual premiums remain competitive on a year to year basis. Without compromising on the standard of cover.

What is the least amount of Directors and do they have to be residents?

The company is only required to have at least one Director. But, normally there is between three and five depending on the size of the premises/block. There is no need for Directors to be residents. The majority of most Directors are normally residents. This is to avoid disproportionate influence from people who do not have experience of living in the property. The landlord of the building has no legal right to be a Director.

Can the leaseholders exercise the Right to Manage if the landlord lives in the building?

It cannot apply where the premises fall within resident landlord exemption. The criteria for this exemption are as follows: –

a) The premises are not a block of flats

b) There are less than four flats

c) The landlord or an adult member of their family has occupied one of the flats as their only or principal home for the last 12 months.

Can a leaseholder ask the landlord to provide the names of the other leaseholders to invite them to take part in the process?

It is only the Right to Manage Company that can insist on the landlord providing the names of the leaseholders for this purpose. In the first instance, it would be necessary to speak to the flat owners or check the Land Registry. To ensure accuracy it may be best to use a solicitor.

What sort of majority do we need to go ahead?

You must have at least a 50% majority to proceed. As long as at least half of the leaseholders in the block of flats are in support the right to manage can proceed.

What are the responsibilities of the company Directors?

All Directors have the responsibility to serve the best interest of the members of the Company. This goes as far as managing the property in the best interests of all leaseholders of the estate. Right to Manage companies can appoint a managing agent to deal with the day to day management of the estate itself. However, we can provide you with Directors & Officers insurance to cover any liability.

Will we be able to choose our own managing agent once we have the Right to Manage?

Yes, Right to Manage Companies can find and instruct their own managing agents. The Association of Residential Managing Agents (ARMA) adopted a code of practice with the Royal Institute of Chartered Surveyors (RICS). It is important that you take the time to choose your own managing agent.

Can we expect to save money?

Yes, you very likely will. Many leaseholders are facing excessive charges for compulsory items. Things like buildings insurance, alarm monitoring, and maintenance contracts. We would be more than happy to supply you with a like for like quote. We believe it would be substantially less than what you are currently paying. We also ensure that our prices stay low at renewal to continue saving you money. Don’t hesitate to ask us for a like for like quote.

Who owns the freehold after the Right to Manage?

The freeholder would not change. The freeholder retains his obligations and responsibility held under the Lease. This is apart from the management responsibilities of the building. These transfer to the Right to Manage company. The collection of ground rent would still be required under the right to manage.

Is the Right to Manage Company bound to carry on with the existing contracts entered into by the landlord?

The takeover of the management responsibilities will bring an automatic end to all the existing contracts. The company directors can then choose whether to continue with the contracts or not. For instances such as cleaning and insurance.

The Right to Manage is in force, but the landlord insists that they continue to insure the building, is this correct?

No. The company and its directors have taken over the management function from the landlord. This includes any management company that may have previously been in place. The management functions include the insurance of the building. We would be more than happy to give you a quote in this regard.

What can leaseholders do if the landlord fails to provide any information requested?

The landlord may decline to give over the required information. Leaseholders are then entitled to serve a default notice which will give the landlord 13 days to comply. If he fails to do so they can then bring an application for compliance in the local County Court under Section 107. This may not seem to be a practical solution but the court can make a cost order against the freeholder as well as granting the order requested. It is advisable to use the services of a solicitor to do so.

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