Proposals to reform leaseholders’ right to manage

Posted on: January 30th, 2019

Ben Loosemore, Associate Solicitor in our Commercial Property team discusses the latest proposals for leasehold reform.

The right to manage is a statutory procedure that allows qualifying tenants of leasehold flats to create a new company to take over responsibility from the landlord for the day-to-day management of their building.

The Law Commission has recently published a consultation paper on the current right to manage process finding that it is overly technical with small errors leading to lengthy technical arguments, too costly with leaseholders having to pay the landlord’s costs, and restrictive in that the process is unavailable to owners of leasehold houses, multi-block buildings on estates and those buildings which have more than 25% non-residential space.

The Law Commission’s consultation paper therefore aims to simplify and speed up the process by proposing the following reforms:

  • Reducing the number of notices that leaseholders must serve to make the process easier.
  • Implementing deadlines for disclosure of information to speed up the process.
  • Requiring each party to bear its own costs of tribunal action to make it cheaper for leaseholders.
  • Extending the qualifying criteria so that leasehold houses, multi-block buildings on estates and buildings with more than 25% non-residential space can qualify.

If the Law Commission’s proposals are implemented it will be a positive step forward for leaseholders in simplifying and speeding up the current right to manage process. The Law Commission’s consultation finishes on 30 April 2019 so a decision won’t be made until after that date, but in the meantime a copy of the Law Commission’s paper can be found here.

If you would like any further information on this area of law or the existing process, please get in touch with Ben Loosemore in our Commercial Property Team or Dispute Resolution team here.