Right to Manage and Leasehold Enfranchisement - How They Compare

Share:    

Right to Manage and Leasehold Enfranchisement - How They Compare

When a group of tenants that own flats in the same building get together to collectively buy the freehold from the landlord, it is known as 'leasehold enfranchisement' or 'collective enfranchisement'. This is a statutory action under the Leasehold Reform Act (1993). Those tenants participating in the enfranchisement are able to become their own landlord and can give themselves leases on their property of up to 999 years and revoke the need to pay ground rent.In order for a group of tenants to bring an action for leasehold enfranchisement the following conditions must be satisfied:- There must be at least 2 flats held within the freehold.- No more than 25% of the freehold building must be used for non-residential purposes.- At least 2/3 of the flats must be let to qualifying leaseholders*.- As a minimum, 50% of the flat owners must want to participate in the enfranchisement.* A qualifying leaseholder is one that has a lease that was granted for a minimum of 21 years.This differs from a lease extension in that there is there is no requirement for the tenant to have owned their flat for a minimum of two years.Again, the burden of paying for the action rests on the tenants. Enfranchisement also incurs additional costs due to the requirement of group agreements and eventual management of the building.Right to manageThe right to manage (or RTM) is a statutory right awarded to tenants under the Commonhold & Leasehold Reform Act (2002). The right to manage does not involve purchasing the reversionary or freehold interest, instead it merely facilitates tenants with the legal capacity to manage the landlord's building in which their flat is situated. Normally the tenants will form a Right to Manage company, through which decisions concerning the management of the building will be held. Right to manage gives tenants the chance to take control of their living arrangement. It does not carry the pre-requisite of having an incompetent landlord.The legal requirements for a tenant to issue a right to manage notice are the same as that of an enfranchisement action.Although a right to manage allows tenants flexibility in making day-to-day decisions, it will not facilitate lazy tenants wishing to save money on maintenance costs through allowing the flats to deteriorate.If you are a landlord, you can become part of the Right to Manage company, thus enabling you to vote on issues that concern your freehold. Not only this but the Right to Manage company will reimburse you for any costs incurred in passing over this right.The landlord is obliged to provide the Right to Manage company with all the information and records needed for them to run the building successfully. Not only this, but any money that has been collected as part of service charges will be passed over to the right to manage company.Regardless of whether you are entering into a leasehold enfranchisement or right to manage agreement, the legal process is very technical. Make sure you instruct a solicitor who specialises in these fields to help you with the legal side.

POST COMMENT

Choose Mountain Walking Holidays Christmas tree ornaments | Christmas Tree Ornaments Cartoon christmas tree ornaments | Christmas Tree Ornaments Golden Triangle with Tiger Tour – Get Different Funs by Visiting India Christmas tree ornaments coloring | Christmas Tree Ornaments Christmas tree ornaments clipart | Christmas Tree Ornaments Hybrid Striper and White Bass Fishing Report Relaxed MBT shoes With Numerous Various Bali Tours You Can Enjoy Your Holiday In Bali Strip That Fat Weight Loss: How to Maintain Your Success Explore Victoria Falls: Victoria Falls comes 5th out of 25 African attractions of the year 2010! Disney World Savings Guide-the Disney trip will not be so costly anymore New Kia Cee'd London