Property Tip: Right to Manage Company

Sunday, June 1, 2014
Belsize Accountancy in RTM companies, Roght to manage company, Tax, UK property, limited company accounts

If you live in a block of leasehold flats and you’re not happy with the management of your building, you can either:

        1. Ask the Leasehold Valuation Tribunal (LVT) to appoint a new manager.

        2. Take over the management responsibilities, known as your ‘Right to Manage’.

The Right to Manage lets you and the other leaseholders take over certain management responsibilities (such as maintenance) from the landlord (freeholder), without having to prove bad management, negligence or wrong doing by the landlord. If you fulfil the following criteria, you can set up a limited company with the other leaseholders. The landlord will then transfer the management responsibilities to that company. You and the other leaseholders can then manage the building yourselves or pay a managing agent to do it for you.

1. At least two thirds of the flat owners (leaseholders) within the physical block must have long leases (more than 21 years at the time of issue).
2. At least 50% of the flat owners (leaseholders) within the physical block of flats must want to go through the process.
3. No more than 25% of the block may be used for non-residential use (excludes car parks and common areas connected with the flats).

You may claim the Right to Manage your property from £35 per flat including VAT, subject to a minimum charge of £450. In the Right to Manage  process, the law requires that you pay the reasonable legal costs of the freeholder, which should be around £600 + £25 per flat up to a cap of £3,000.

 

Belsize Accountancy can help you to set up your limited company and get you the most benefit out of the Right to Manage. If you have any further enquiries, please contact for more advice on 0207 043 0052 or email info@belsizeaccountancy.co.uk.

 

Article originally appeared on Belsize Accountancy (https://belsizeaccountancy.co.uk/).