RTM Claims – Commonhold and Leasehold Reform Act 2002

28 August 2015

Finally we seem to have the definite answer in the ongoing saga of whether an RTM company can claim and manage multiple buildings.

For the past few years RTM practitioners have waited patiently while the legal battles are fought over how a multiple building development should be claimed. Should one RTM claim the buildings with separate claim notices, or is a separate RTM company required for each building?

This didn’t matter if your estate was a single building development, but what about large multi building estates? Anyone with any experience of RTM knows the importance of getting the paperwork exactly right. Until now there was no official guidance as to how to structure the claim. In fact many people felt that it was better to tailor the claim to the recipients’ preferences rather than risk a counter notice and FTT case.

But now, the Court of Appeal has decided the matter: multiple buildings; multiple RTM companies. When considering its judgement, the court decided that to allow a single RTM company to claim multiple buildings could lead to the absurd situation where a single RTM company managed buildings in entirely different locations. Additionally, the court decided that the possibility of company members in a large building outvoting those in a small building on the same estate was too great to ignore.

How does this matter practically? Those practising RTM claims will need to be alive to the intricacies of the existing lease structure. Many large developments have complicated lease schedules which will still remain valid after an RTM claim. Managing agents and/or leaseholders who pursue these claims will have to carefully plan how they intend to administer the service charge post RTM. Claiming a single building in a large development of multiple buildings may, although technically possible under the RTM legislation, raise too many lease issues to be viable. Professional involvement seems a sensible course of action.

For such estates however, multiple RTM companies would be perfectly entitled to appoint the same managing agent, and indeed a possible solution could be to create an “umbrella” management company that controls each RTM.

RTM remains, in our view, an overwhelmingly positive step for most developments, but the leaseholders and any prospective managing agents should be alive to the technical challenges that exist.

Negotiating the maze of multiple building RTM claims can be challenging

Negotiating the maze of multiple building RTM claims can be challenging