Much has been mentioned of Right To Manage.
So what is it?
Well if you are a leaseholder in a block of flats or live in a retirement development, the block or development has to be managed.
So, you have a management company that is appointed to manage the block or development.
The problem often occurs when the landlord appoints a managing agent that has a close connection to them.
When this happens the landlord can use the managing agent to generate hidden profits that find ways of being diverted to them.
That leads to a conflict of interest that means the sole concern of the landlord/managing agent is not the leaseholders, but revenue generation.
It is that conflict of interest that directly lead to the many issues leaseholders have with Firstport.
Service, value for money, honesty went out the door as an increasingly financially distressed landlord made more and more demands on Firstport to increase income and thereby increase the flow of funds to the landlord.
Hence poor service levels, escalating charges, price fixing, 40% insurance commissions became the order of the day as was work that was not needed.
For any qualifying block/development, leaseholders have a Right to Manage enshrined in law.
At present this means those with no more than 25% of a development being put to commercial use. So a development combined with shops can be a problem.
As it says it is a Right to Manage. That means exactly that!
If more than 50% of the residents get together and wish to excercise a Right to Manage, they can do so.
The landlord has no right to object on any grounds save a few particular circumstances which will be explained shortly.
That the landlord counters that they "have done a good job in managing" is not a ground for appeal.
If it has been decided by more than 50% of the residents that they want to take control, they form a Right to Manage Company.
They appoint directors and file Articles of Association.
They serve notices on the leaeholders and landlord who has the option of agreeing to the handover or objecting to the RTM.
The grounds for objection by the landord are very limited.
They may object if the block/development do not qualify for RTM.
They may object if notices have not been served properly.
They may object if the RTM company has not been properly formed.
They may object if less than 50% of the residents are part of the process.
If all these matters are complied with the RTM must go ahead.
Because companies such as Firstport are desperate to keep developments under their management, they will look for the slightest error in the RTM process to launch an appeal.
So any such process must be done accurately and with methodical precision.
Anyone thinking of carrying out a RTM must use an experienced professional with a good track record. You can expect to pay in the region of £150 per flat for this service, or you may negotiate for the agent carying out the RTM to be awarded the management contract on completion of the RTM. The choice is yours?
The responsibilty to manage the block/development is down to the RTM company as soon as they take over.
And it is quite a responsibility. The RTM company has to undertake all the functions undetaken by the previous managing agent.
Unless a block under management consists of perhaps 4 flats, it would in the opinion of About Firstport be foolish in the exdtreme to manage any block/development by yourselves.
Instead appoint a managing agent of your choice to do all the work. it has even happened that after a RTM some developments have re-appointed Firstport!
Though of course the management fees and service charges were much reduced and service levels improved, but of course in these cases Firstport are answerable to leaseholders and not beholden to the landord.
Once everything is up and running a couple of meeting a year to decide what is needed (and please take a long term view of maintenance) do not go down the "cheap is better road?"
Properly planned maintenance pays dividends.
Those that have carried out a RTM have found that their service charges have fallen by at least 30%.
If you are currently paying a £4,000 service charge with Firstport each and every year £1,200 is literally going to pay the interest on Firstport's debts.
And remember, every development that carries out a RTM denies Firstport much needed income. So in carrying out a RTM you do not simply help your development, you are coming to the aid of all those victims that are unable for whatever reason to carry out a RTM.
The only way to solve a problem like Firstport is to put them out of business. And the only way to do that is to reduce their income.
Time to do that Right to Manage!
