The Right to Manage is not always the answer

When the development was completed, the freehold interest was sold to a large UK freeholder. This freeholder had an arrangement with a national managing agency to manage its wider portfolio and Shotover Mound fell into this agreement.

The leaseholders were unhappy with the following issues:

• The national agent’s nearest office was 40 miles away.
• Many of the services were fulfilled using contractors based near the agents office, adding to costs.
• The managing agents representatives rarely visited the site. Inspections were conducted by the cleaning contractor.
• Common Ground reviewed the accounts and identified that the insurance premiums seemed very high relative to the risk. Other savings were identified by use of maintenance contractors based in Oxford.

Common Ground were appointed by the leaseholders initially to acquire the right to manage (RTM). An RTM company was set up and a claim notice filed on behalf of the leaseholders by Common Ground. As well as block management, Common Ground can also arrange the right to manage.

The right to manage can be an expensive process and is rarely achieved without thousands being spent on legal fees (The Commonhold and Leasehold Reform act 2002 requires the applicants to pay the freeholders legal costs). Crucially, Common Ground invited the freeholder to the negotiating table.

The freeholder accepted the invitation to negotiate and Common Ground were appointed by the freeholder to replace the national firm. Common Ground negotiated a 30% reduction in the insurance premium and further savings were achieved by using Oxford based contractors