RTM company formation requirements: whereas once leasehold property was sometimes spoke about with dread of potentially high service charges and difficult management schemes, amendments to the law surrounding the majority of leasehold flats now offers a fairer platform.
Leaseholders in flats now have a right to force transfer of the landlord's management functions to a company of their own - a right to manage company or RTM. The law came into effect in September 2003 as part of the Commonhold & Leasehold Reform Act 2002 and enables leaseholders to take on responsibility of the management of their homes – subject to certain criteria being met.
Coddan can provide a full turnkey RTM company registration package from which to set about establishing your own right to manage company online, with a simple registration process that provides you with a RTM registered company correctly and formally registered ready for you to use for your property.
It is important, however, to understand the qualifying criteria and what exceptions may prevent you from proceeding with a RTM company. Here's a brief outline of the essential elements to be met: -
Only owners of flats can apply and the building must be self-contained – meaning those in separate blocks also need separate companies. Those applying must make up at least 50% of the total leaseholders and include at least two flats - any non-residential parts must not exceed 25% of the total floor area. The leases of those qualifying tenants must have been originally granted for more than 21 years. In most cases of modern residential flats this is the case.
Providing the criterion is a met, leaseholders needn't apply to the courts, nor get landlord’s consent and Coddan can provide the vehicle to make that happen. Through the simple RTM company registration procedure you can register an RTM company in the correct format.
To apply, the right to manage can be actioned by serving formal written notice on the Landlord and forming a RTM company which must itself formally invite any qualifying leaseholders. An RTM is a company limited by guarantee without share capital and must have a specified form of constitution, and you can be certain that all right to manage companies formed via Coddan comply with this legislation and are formed on the correct tailor-made memorandum & articles of association.