The RTMF scheme for retirement flats only applies where it is the intention to appoint a replacement management company. In view of the statutory obligations we do not recommend that owners of retirement flats take on self-management.
The RTMF scheme provides a complete RTM service at no cost to leaseholders. Unlike solicitors and most other agencies, our approach is very hands-on. It usually starts with a free presentation to all owners in the residents lounge. If instructed to proceed, we handle absolutely everything on your behalf, except the selection of your new management company, which under our guidance is decided by your own appointed committee.
What does it cost?
Under our retirement scheme, the RTM process is free to all leaseholders. Each supporting leaseholder is asked to contribute a small good faith deposit (currently £40) but this sum is fully refunded on completion of the RTM process.
What are the requirements?
In order to be eligible for the Right to Manage both the building and applicant leaseholders must meet a statutory qualification. RTM only applies to leasehold owners of flats and not to leasehold houses or bungalows. Most blocks of retirement flats are eligible for RTM. A qualifying tenant is a leaseholder whose lease was originally granted for a period exceeding 21 years. The building will qualify if at least two thirds of the flats are leased to qualifying tenants and the premises consist of a structurally detached building or part of a building that can be served independently. Properties owned by the local authority are excluded. Where an estate comprises several blocks of flats, each block must qualify in its own right and an RTM claim must be submitted for each block.
The right to manage must be exercised by an RTM company incorporated with prescribed articles. It is not a company with shareholders but a company limited by guarantee. All leaseholders are entitled to become members with individual liability limited to £1. Since November 2009 RTM companies only require a single director although a board of three or more is recommended. Directors are not required to be leaseholders at the property in question but an association with the property is recommended. For example, it is common for relatives of residents to act as directors.
What support is required?
Legislation requires 50% of leaseholders (50% of total flats in building) to become company members before an RTM claim notice can be issued although it is generally advisable to aim for about two thirds to join the company, which avoids any criticism that the procedure is undemocratic.
How long does it take?
Following the incorporation of your RTM company, the formal procedure for exercising RTM is started by service of a statutory claim notice on the landlord. Thereafter it follows a prescribed route comprising further notices and counter notices. RTM is usually determined within two months with the right to take over management following three months later. For a sequential summary of our RTM scheme for retirement flats see our web-page entitled ‘Step by step procedure’.
Are directors needed after the new management company takes over?
The responsibilities of management transfer to the appointed management company and thereafter the active role of RTM directors is minimised. RTM Directors would not generally need to be involved in day to day management matters. Their function is closer to that of trustees and they would normally only become involved if the appointed management company is failing in its contractual obligations. Owners of retirement flats are often reluctant to participate as directors of a limited company. However, once the process is explained and the risks minimised, these fears are usually dispelled.
How is the replacement management company selected?
To ensure that the appointment of the new management company is conducted democratically (and seen to be conducted democratically) we invite members to form their own Selection Committee. For information on the procedure for selecting your new management company see our web-page entitled ‘Management Selection Process’.
Note: The RTMF does not recommend specific management companies. We have no agreements with management companies and we do not receive commission from management companies. However we will provide impartial guidance and on occasions we may advise against management companies that are financially unsound or have a poor track record and previously proved unsatisfactory.