Legal Q&A: how can the leaseholders take over the management of our building?

How can a group of leaseholders go about taking over the management of our building from the useless management company and freeholder?
  
Merrily Harpur
Fiona McNulty1 April 2017

Question: I live in a block of six flats, and me and my fellow leaseholders think our freeholder and the useless management company he employs demand far too much in service charge, while not running the building properly. We have been told we can take over the management by using the Right to Manage process or by enfranchising. What is the difference?

Answer: You can take over the management of your building, either by agreeing with the freeholder that the management functions should be transferred to a nominated Right to Manage company, or exercising your statutory right to force the transfer of the management functions of the building to a company set up by you.

Try to get your freeholder’s permission to transfer the management responsibilities. If the freeholder does not agree to your request, start the statutory process, as the tribunal can make an order transferring the management functions to you. The Right to Manage company will become responsible for the management of the building and will have many duties and liabilities, for example, collecting service charge and dealing with the upkeep of the communal areas and the structure of the building.

Enfranchisement involves buying the freehold from your landlord. The freehold should be valued by a surveyor and a statutory notice should be served on the freeholder offering a realistic price. Generally, a company is set up to own the freehold.

Enfranchisement can take longer and be more expensive than acquiring the Right to Manage.

Qualifying criteria must be satisfied in each instance, so do seek legal advice as the procedures are quite complex.

These answers can only be a very brief commentary on the issues raised and should not be relied on as legal advice. No liability is accepted for such reliance. If you have similar issues, you should obtain advice from a solicitor.