enfranchisement
 |
 |
 |
 |
 |
FOR OUR NEW WEBSITE, PLEASE CLICK HERE
enfranchisement, lease, leases, extension, extend, leasehold, reform, freehold, collective, chartered, surveyors, landlord, brighton, worthing, littlehampton, west, sussex enfranchisement
The Commonhold and Leasehold Reform Act 2002 - Functions of the RTM company (Right to manage)
The company takes control of all the landlord's management functions under the lease. These management functions are defined as anything relating to services, repairs, maintenance, improvements, insurance, and management. Any obligation owed to the tenants by the RTM company by virtue of these functions is also owed to the landlord.
The RTM company must monitor performance of all covenants by the tenants and report to the landlord within three months from when they discover any breaches of these. This would be the case unless the breach had been remedied, reasonable compensation paid or the landlord had previously decided that breaches need not be reported to him. It is open to the RTM company to enforce all tenants covenants except any rights of re-entry or forfeiture.
An important addition to the RTM company's duties is that of replacing the landlord in relation to granting consents or approvals under the lease, provided it has first given notice to the landlord.
The landlord can object to the approval by notice and the dispute can be determined by the Leasehold Valuation Tribunal.
The landlord will have a share in the RTM company in his position of landlord, plus a share in respect of any flat in his control and therefore has voting rights.
Apart from being liable to action by the landlord or the tenants regarding the management covenants in the lease the company is still subject to rights of the parties to apply for the appointment of a manager in the Leasehold Valuation Tribunal under the Landlord and Tenant Act 1987 and for the service charges to be challenged under the Landlord and Tenant Act 1985 on the basis of reasonableness.
There are no proposals in the Act for any requirement for professional management by an agent nor any requirement to prove management competence by the RTM company.
Various changes are made to the qualification and valuation criteria relating to enfranchising and lease extension of flats under the Leasehold Reform Housing and Urban Development Act 1993 and to houses under the Leasehold Reform Act 1967.
The residence test is abolished for both collective freehold acquisition and lease extension. However, in the case of lease extension there is a new qualification that the leaseholder must have owned the flat (but not necessarily lived in it) for the preceeding two years.
The limit on non-residential parts of the building is raised from 10% to 25%, therefore a building can be subject to collective freehold acquisition where no more than 25% of the floor area is non-residential.
The number of qualifying leaseholders required to participate in a collective enfranchisement is reduced from two-thirds to just one-half of the number of flats in the building or block.
The valuation date is fixed at the date of the application for collective enfranchisement or lease extension.
No marriage value is payable in cases where a lease has 80 years or more unexpired at the date of application; the landlord's share of the marriage value is fixed at 50%
Personal representatives of a deceased's estate will be entitled to make the claim for the freehold or lease extension provided the tenant had the right to do so immediately before his death but they must not serve the Notice of Claim any later than two years after the grant of probate or letters of administration.