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What is the Right to Manage?

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If you are not ready to undertake the freehold enfranchisement process, but you do want more control over your property, exercising your right to manage may be a great option to consider. 

The freeholder still owns the property, however, for the leaseholder of a house this gives you the right to manage your whole property to give you more control. 

For the leaseholders of a flats you will set up a ‘right to manage company’ made up of the leaseholders in the building, or a separate management agency appointed by the leaseholders.

Eligibility Criteria

The eligibility criteria for the right to manage is the same as for freehold enfranchisement. 

This includes:

  • Lease must be for a term of at least 21 years.
  • Tenant must have been the legal owner for at least 2 years immediately before serving the notice requesting the right to buy.
  • There cannot be any undertenants.
  • Tenants in a block of flats need to satisfy the ‘residency test’.
  • For a block of flats the building must have at least 2 flats and no more than 25% of the building can be used for non-residential purposes. 
  • At least 50% of the flats must want to go through the process. 
  • Lease must not be excluded.

Benefits of exercising your right to manage

If you have the money and support from other leaseholders if needed, freehold enfranchisement might be the option for you. However, if you are not ready to make that step there are some distinct characteristic of exercising your right to manage that must be considered.

These include:

  • The biggest advantage to the right to manage is cost – you don’t have to pay the purchase price to the freeholder which makes the right to manage a much cheaper option.
  • Exercising the right to manage will not increase the value of your property.
  • The freeholder will still be involved. They are still the owner of the property and you will still have a lease with them. Therefore, any lease extensions, lettings and alterations may still require input from the freeholder. 

Other considerations

The right to manage process takes around 5 months to complete and you will be required to pay the reasonable costs incurred by the freeholder. This is usually around £625 per flat and are capped at £3000. It is recommended that you keep paying normal costs like service charges until the right to manage process has been finalised. If you decide you want to take the next step to freehold enfranchisement more information can be found here.

Should you require any additional information in relation to Right To Manage then please get in touch at [email protected] or call our team on 0330 127 8888 and our team will be more than happy to help.

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