Block vote – your right to take over man­age­ment of flats

Yorkshire Post - Property - - PROPERTY - Ni­cholas Kis­sen

IF you own a flat in a large block you should be aware that you would have a lease set­ting out your rights and obli­ga­tions.

You prob­a­bly pay ground rent and ser­vice charges to your land­lord. The man­age­ment of the build­ing may be sat­is­fac­tory and the ser­vice charges kept to a rea­son­able level. If not, you and the other flat own­ers could take over the man­age­ment of the build­ing,

Ex­er­cis­ing Right to Man­age or buy­ing the free­hold are the two prin­ci­pal ways to take over the man­age­ment of your build­ing.

the Com­mon­hold and Lease­hold Re­form Act 2002 gave flat own­ers the le­gal right to take con­trol of their build­ing. It was de­signed to be in­ex­pen­sive and straight­for­ward where a se­ries of steps are fol­lowed and no­tices served be­fore ac­quir­ing the right to take over the man­age­ment of a build­ing. Firstly, the build­ing must qual­ify. At least twothirds of the flats must be on leases granted for over 21 years. Se­condly, half the flats must agree to par­tic­i­pate in the process. If there are only two flats both must take part. There is no need to live in the flat to take part. So if you let it out you can still par­tic­i­pate. Build­ings com­pris­ing a mix­ture of flats and shops also qual­ify so long as the non-res­i­den­tial area is not more than 25 per cent.

When you have the re­quired num­ber of flats, a Right to Man­age Com­pany (RTM Com­pany) must be formed. The RTM Com­pany must in­vite those own­ers not al­ready par­tic­i­pat­ing to join in. When there is 50 per cent par­tic­i­pa­tion, and 14 days af­ter the last in­vi­ta­tion no­tice was sent to flat own­ers, a Claim No­tice is sent to the land­lord. If all goes smoothly the RTM Com­pany takes over the build­ing not less than four months af­ter the Claim No­tice is served. If the claim is op­posed then the lo­cal Lease­hold Val­u­a­tion Tri­bunal (LVT) can be asked to de­cide if Right to Man­age should be per­mit­ted in re­spect of the build­ing.

From day one of tak­ing over man­age­ment the RTM Com­pany be­comes re­spon­si­ble for un­der­tak­ing the land­lord’s obli­ga­tions in the leases. This is in ad­di­tion to run­ning the com­pany in ac­cor­dance with cor­po­rate law and en­sur­ing the build­ing com­plies with cur­rent health and safety reg­u­la­tions. the Lease­hold Re­form Hous­ing and Ur­ban De­vel­op­ment Act 1993 gave flat own­ers the right to force their land­lord to sell the free­hold to them, in a process known as Col­lec­tive En­fran­chise­ment. The qual­i­fy­ing con­di­tions both for the build­ing and for the num­ber of lease­hold­ers are broadly sim­i­lar to those for Right to Man­age. You can ap­proach the free­holder to see if they will sell on an in­for­mal ba­sis. If this does not progress a for­mal ini­tial no­tice can be served on the land­lord with an of­fer price The land­lord then has at least two months to serve a counter-of­fer which would then be fol­lowed by a pe­riod for ne­go­ti­a­tion. If the price is not agreed an ap­pli­ca­tion can be made to the LVT to de­cide what it should be. Fol­low­ing on from this the free­hold can be trans­ferred to the flat own­ers per­haps in the name of a com­pany they have formed.

When buy­ing the free­hold the costs in­volved should be taken into ac­count. Not only those of your own valuer but also you will have to pay pro­fes­sional fees run up by for cer­tain work in­clud­ing val­u­a­tion and con­veyanc­ing.

Buy­ing the free­hold of a build­ing can be a com­plex process par­tic­u­larly where it is a large block of flats. Ex­pert ad­vice is es­sen­tial from the start of the process. In­put from a lawyer and a valuer can help in an­tic­i­pat­ing and over­com­ing ob­sta­cles that lie in the way of suc­cess­fully com­plet­ing the pur­chase.

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