Moves to make it easier for leaseholders to take control of their freeholds through right to manage have been broadly welcomed by the Law Society of England and Wales, in response to the Law Commission’s consultation
The government asked the Law Commission to review right to manage (RTM) legislation to make it simpler, quicker and more accessible for leaseholders. The consultation makes provisional proposals for reform to current RTM legislation.
The consultation paper discusses the problems with the current law including: restrictive criteria, such as the inability of an RTM company to manage multiple blocks on an estate, the exclusion of premises with more than 25% non-residential space, and the exclusion of leasehold houses from the right to seek RTM.
The Law Society recognises that leasehold reform is a complex and important task with different interests at stake. We are keen to work with the Law Commission and the government to develop improvements and alternate means of addressing the issues.
The conflict of interests between landlords and tenants and between those who commission works to buildings, and those who pay for them, are problems previously identified by government (the Office of Fair Trading and its successor, the Competition and Markets Authority). Providing leaseholders with a means of exercising the Right to Manage that is more understandable and faster to pursue has an important place in the range of leasehold reforms under consideration and development.
The Society is concerned that the Law Commission appears reluctant to extend the RTM scheme to freeholds particularly as there are so many residential developments with a mix of freeholds and leaseholds.
The Society believes that the tenants should be consulted by the directors of the RTM on all material matters, not just service charges, such as making and enforcing covenants or regulations (e.g. consenting to pets, alterations, etc. where there is a discretion). It is important that RTM is not dominated by just a few people. It is important to remember that the point of RTM is to give all of the tenants control.
