The Process Of Right To Manage Company Formation

The process of taking on the right to manage [ or RTM] a property is not in principle

, perhaps, the most complicated area of law, but you do need to be very careful and make sure that you follow all of the necessary guidelines so that everything runs as smoothly as it possibly can.

Time limits, for example, are particularly tight and strictly enforced. This article is designed to give you an overview of the steps you will need to take in order to achieve right to manage company formation.

Make the decision:

Firstly, you need to make the decision to gain the right to manage and make sure that enough people are interested in doing so, or else you won't be able to get anywhere. You don't need to prove your reasons for doing so, but it will definitely help if you have a good idea of what they are before you start. Getting and keeping interest from enough of your fellow tenants is probably the hardest step.

Check eligibility:

Before starting the process of right to manage company formation, you will need to check your eligibility to do so. Your building needs to have more than four flats and in order for leaseholders to qualify, their original lease needs to have been for longer than 21 years. You will also need at least half of all leaseholders to qualify in order to proceed.

Company formation:

Your next step is to start the process of right to manage company formation itself. Do some research to make sure you know how everything works. It can also be a good idea to hire a solicitor specializing in RTM cases to guide you through the process to make sure you do everything correctly, from putting together your articles of association to appointing a board of directors.

Notice inviting participation:

Once you have the core of the company (its directors) together, you will need to send out a Notice Inviting Participation to all other qualifying tenants, including your current landlord. This is to invite them to participate in your company.

Information gathering:

You will also need to gather information concerning the current management of the building - such as details of contracts and accounts, for instance - in order to make sure you have all the detail you need before taking over control of the building.

Notice of claim and counter-claim:

Two weeks after serving a notice inviting participation, you will need to serve a Notice of Claim to your current landlord. They will then need to respond to either allow your claim or to give reasons why they think you aren't eligible. As long as you have followed the correct procedures, you shouldn't have a problem here.

Acquisition:

The final part of the process of gaining the right to manage is acquisition itself - after all the details have been agreed, the company is in place and you are happy to proceed, a date needs to be set for the handover, after which your new company will be responsible for the management of your premises.

by: Tim Bishop

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