CA issues response to Law Commission’s consultation on Leasehold Home ownership: Exercising the Right to Manage

30 April 2019

The Conveyancing Association (CA), the leading trade body for the conveyancing industry, has today (29th April 2019) announced it has responded to the Law Commission’s consultation entitled, ‘Leasehold home ownership: Exercising the right to manage’.

The consultation paper was published in January this year and the deadline for responses recently passed on the 30th April 2019.

The Right to Manage (RTM) was introduced by the Commonhold and Leasehold Reform Act 2002 and ‘gives leaseholders the right to acquire the management functions in respect of their building, these being functions relating to services, repairs, maintenance, improvements, insurance and management’.

As the consultation paper states, the RTM was introduced ‘to give leaseholders the opportunity to take over the management of their building in certain situations’. With this consultation, the Law Commission is reviewing the existing regime with a view to ‘recommend reforms to give leaseholders easier access to the RTM, and with fewer costs, while safeguarding the interests of landlords to the extent appropriate to protect their interest in the property’.

The CA supports many of the Commission’s proposals including the extension of the RTM to leasehold houses as well as flats, plus it believes it should be extended to freehold houses managed under an estate rentcharge.

The CA also would like to see a joined-up approach where there are sufficient qualifying tenants across multiple buildings in the same estate who wish to exercise the RTM and support proposals that they should be able to exercise the RTM across multiple buildings under one RTM company.

The current position is that each building would have to create its own RTM. Being able to have an umbrella RTM company would reduce administration and enable the residents to strike better commercial deals.

It also argues for a better delineation of functions which the RTM company takes on when exercising the RTM, for example, if part of the estate requires specialist management such as potentially with retirement homes, marinas, leisure centres, etc then the RTM company should be required to employ managers with the expertise in the relevant area.

The full Law Commission consultation document can be viewed at: https://www.lawcom.gov.uk/project/right-to-manage/#right-to-manage-consultation

Beth Rudolf, Director of Delivery at the Conveyancing Association, said:

“The Law Commission proposals are consistent with the improvements needed to enable more leaseholders to exercise their right to manage and to create robust and efficient management arrangements. It could also mean those blighted by unreasonable permission fees could have a greater say in how they are charged.

“We also recommend in our response that the system should be as flexible as possible and allow residents to transition an RTM company into a Commonhold Association, where leaseholders decide to convert to Commonhold, once the Law Commission’s proposals to reinvigorate this form of co-operative tenure are delivered.

“We hope that by enabling residents to exercise these rights more fluidly home owners will have more options and greater say in the management of the shared amenities, and a greater feeling of control and confidence that funds are used efficiently and their interests are effectively represented.”

For further information on The Conveyancing Association, and to read the response in full, please visit: www.conveyancingassociation.org.uk