Block Management – How a Tribunal Can Appoint The Right Property Management Company
Flat owners’ rights
Are you having a problem with the current management of your block? There are several solutions available to you, including the Tribunal or Court Appointed Manager.
The Landlord and Tenant Act 1987 Section 24 provides flat owners with the right to apply to a Tribunal to have a manager appointed in circumstances where they can prove:
1. that their current managers are in breach of their obligations and
2. it is just and convenient for the Tribunal to do so.
The application can be made either by a single flat owner or by a group.
NB this right is usually referred to as a “Court Appointed Manager” though technically it is actually the First Tier Property Tribunal, rather than the County Court, which hears the application and makes the decision.
Got a question about applying for a Court Appointed Manager? Call us on FREEPHONE 0800 1404544 for no strings attached FREE initial phone advice.
Better block management – alternatives to the Court Appointed Manager
Having a manager appointed will not afford you any legal title to the property, you won’t be able to make any changes to your lease and you won’t necessarily have any control over the management of the building itself.
Therefore, you may want to consider the two other ways of changing the management of your block – both of which are far more common and popular than the Court Appointed Manager;
· Collective Enfranchisement – You may have the right to group together and purchase the freehold of your block from your freeholder under the Leasehold Reform Housing and Urban Development Act 1993.
This grants you total control of how your block is run. You are also free to make changes to your leases and even extend your lease term. You are going to have to pay a price to your freeholder if you want to buy your freehold, as you might expect, but it will increase the value of your flats to own a share in the freehold as well as affording you more control
Click here to read more about collective enfranchisement
· Right To Manage – You may have the right to group together and acquire the Right To Manage from your current manager under the Commonhold and Leasehold Reform Act 2002.
Exercising your right to manage means that, although you would not own the freehold and are not be able to make changes to your leases, or increase the value of your flats, you can take over the management responsibilities from your current manager.
In exercising your right to manage you don’t need to prove any fault on the part of current manager – and you don’t need to pay your freeholder as with Enfranchisement.
Click here to read more about the right to manage
Which of these options are best for me?
Both the enfranchisement and right to manage options give you much more control.
However, one of the downsides is that both these routes mean that you need to get sufficient number of leaseholders on board both supporting the initial application and sticking with you throughout the process. That can prove really tricky – especially with medium sized and larger blocks.
If that’s likely to be a problem, then the Court Appointed Manager route might be best for you. But the problem here is that unlike both enfranchisement and the right to manage, getting the court to appoint a new Property Management Company means you will need to show that the current manager is at fault.
Court Appointed Manager – do I have the right to apply?
To qualify for the right to apply to the First Tier Property Tribunal for appointment of a new block manager, you need to satisfy the following
1. You will need to be a long leaseholder of a “long lease” (which was originally granted for a term of over 21 years) AND
2. Your block must contain at least two flats and not less than 50 % of the flats in the block must be granted on Long Leases.
This right does not apply to houses and there are also some classes of landlord which are excluded from this right;
· The Crown
· A local authority or other public sector body
· A registered social landlord or other housing association, or a charitable housing trust (in some cases)
Convincing the court of a need for change of management – what you need to prove
To get a Court Appointed Manager you will need to prove at least one of the following;
· That the current manager is in breach of their management obligations (look at the lease to see what these are)
· That service charges being claimed from leaseholders are unreasonable
· That the current manager is in breach of any provision of an approved code of practice (e.g. RICS Residential Management Code)
· That unreasonable administration charges have been made or are likely to be made
And
· That it is just and convenient for the Order to be made by the Tribunal in all the circumstances
You will need to gather evidence in support of the above.
Do I need a solicitor?
No – you can make the application yourself without legal advice, but these applications are not easy and it’s usually sensible to instruct a solicitor with plenty of leasehold experience to manage the process for you. It’s worth pointing out that very few solicitors do this kind of work. Many struggle with lease extensions, fewer still deal with right to manage and enfranchisement applications on a regular basis and very, very few have made an application for a Court Appointed Manager.
Our specialist five strong leasehold team deal with these issues exclusively, day in day out.
Court-appointed manager – starting the legal process
The first step for your solicitor will be to prepare and serve a notice upon your landlord under Section 22 of the Landlord and Tenant Act 1987 to let them know you plan to make this claim.
The notice will set out the grounds of your claim and serving the notice gives the landlord a chance to resolve some of the issues, or all of them, perhaps avoiding a claim altogether.
Thinking of Proceeding Further?
If you and your fellow flat owners would like to investigate the possible appointment of a manager at your building further, our specialist Leasehold Property Team are more than happy to set any initial enquiries you have in a free phone call – with no strings attached
There may, however, be enough interest within your building to investigate the possibility of purchasing the freehold, known as ‘Collective Enfranchisement’ or acquiring the Right To Manage. That may well be the better route for you. Our team are happy to discuss those options with you in more detail
NB Don’t forget that you also have rights available to you as an individual flat owner to purchase a lease extension from your freeholder.
Click here to read more about lease extension
Are you looking for a recommended block management company? Just ask us
Our specialist leasehold team deal with an increasing number of freehold purchase and right to manage applications. And one question our clients often ask us is “do you know any good block managers?”
The answer is yes, and we regularly review our list of recommended block management companies. So if you want a recommendation – just ask us
Want to improve the management of your block? We can help. Contact us today
Wherever your block is based in England and Wales, our experienced team can help.
For a FREE initial phone conversations from an expert solicitor on your options,
• contact us today on FREEPHONE 0800 1404544 for FREE initial advice or
• Complete the contact form below