Please find below information we have received regarding leaseholders' rights in the UK, including how to remove a management company.
This is not legal advice but it is information and guidance that residents may find helpful.
Information begins:
The government-funded Leasehold Advisory Service (LEASE) provides free, summary legal advice to help leaseholders decide what to do next: Contact – Leasehold Advisory Service.
Leasehold service charges
The day-to-day management and maintenance of blocks of flats is usually the responsibility of the freeholder. This responsibility can be contracted out to a managing agent on the freeholder’s behalf. The cost of the work is usually recoverable from leaseholders, as a condition of their lease agreements, via a service charge. The lease agreement will normally set out what services charges can and cannot be charged by the freeholder, and the proportion of the charge to be paid by the individual leaseholder.
Service charges must reflect the cost of services to the freeholder. The Landlord and Tenant Act (LTA) 1985 provides that service charges must be reasonable and services provided must be of a reasonable standard. The legislation does not define “reasonable” - what is reasonable will depend on the specific circumstances of the case.
Property management companies must belong to a government-approved redress scheme: The Property Ombudsman or The Property Redress Scheme. These schemes provide for independent resolution of disputes. There is government guidance on the schemes. Where a management company isn’t engaging with leaseholders to discuss service charges, one option might be a complaint to the redress scheme with which they are registered.
In the event of a dispute over service charges, leaseholders have the ability to apply to the First-tier Tribunal (Property Chamber) if they consider that:
- a service charge is unreasonable;
- the standard of work it relates to is unsatisfactory; or
- they don’t consider they should be paying the charge.
The government-funded Leasehold Advisory Service (LEASE) provides a fact sheet on Service charges and more detailed information on Service charges and other issues and Application to the First-tier Tribunal (Property Chamber).
Removing a management company
In general, leaseholders of flats who wish to take over management of their building have the following options:
- An application to the First-tier Tribunal (Property Chamber) (FTT) to appoint a new manager – an application can be made where a freeholder is falling short of fulfilling their obligations under the lease. A manager appointed by the FTT is more than a managing agent. A managing agent works under contract to the freeholder, whereas a manager can be appointed by the FTT to take over the freeholder’s right to manage the building (See: LEASE, What does appointing a manager mean?).
- Taking over the freeholder’s management function – whereby the leaseholders set up a dedicated Right to Manage (RTM) company through which they take control of services, repairs, maintenance, improvements, and insurance in respect of their building (See: LEASE, Right to Manage).
- Collective enfranchisement – whereby leaseholders join together to buy the freehold of their building (See: LEASE, Collective Enfranchisement (buying the freehold of your building)).
There are various criteria that must be met for these options to be pursued – the LEASE webpages provide further information on these.
