Failed applications
Some managing agents leave leaseholders themselves to load the required information for their Right to Manage claim through an online facility, with no due diligence for the information entered, only for the leaseholders to make a critical error along the way, derailing their application when the managing agent comes to send out the necessary notices.
When undergoing the Right to Manage process, it is essential to follow the legislated steps with careful attention to ensure a successful application.
Managing agents shirk responsibility
Managing agents cover themselves by asserting in the small print that they are not responsible for ensuring that leaseholders enter information correctly and that when it comes to submitting the relevant forms, any complication is the leaseholders' fault.
Two recent examples of failures due to this approach involving the same agent demonstrate the risk to the leaseholders ultimately judged to be responsible for the oversight.
A block in Newcastle consisting of over 70 flats appointed the afore referred to managing agent to assist them with their Right to Manage application when weighing up their block management options.
The leaseholder charged with drumming up support for the process from his fellow leaseholders got them to confirm via email that they wanted to participate in the process, but crucially loaded them as people requesting to become members of the RTM company without having issued the formal membership forms required at this point in the process.
When the freeholder then demanded clarification that the required 50% of the block's leaseholders were confirmed members of the company, the application was declined as the coordinating leaseholder had failed to issue formal membership forms to his fellow leaseholders, and consequently none of them had technically become members of the company.
Despite having support for the application, an administrative error caused by the managing agent's failure to do due diligence in every step of the process meant it was rejected, although the agent itself denied any responsibility in the matter.
Leaseholders held accountable
What's more, as the only member of the RTM company, the coordinating leaseholder is now potentially solely responsible for meeting reasonable costs of £3,500 lodged by the freeholder. Additionally, a further £1,800 of managing agent fees stumped up by the leaseholders were unrecoverable, despite the failed application.
In another instance, a block of seven flats in Swindon wanted to go ahead with the Right to Manage. With the same managing agent appointed to assist with the process. Six leaseholders registered their details through the online system.
The agent went ahead creating the claim notice on the leaseholders' behalf, based on the information that they had provided. Unfortunately, the leaseholders had only entered the details of the six who supported the process, crucially neglecting to register the seventh leaseholder's details.
The freeholder successfully challenged the RTM claim and the application was rejected - all because the managing agent had failed to do due diligence in ensuring that details were entered correctly and steps followed precisely along the way.
The six leaseholders were left no closer to getting the Right to Manage despite having paid the managing agent a fee for 'managing' the unsuccessful process and additionally covering the landlord's reasonable costs.
Extra care should be taken with Right to Manage applications
The lesson: leaseholders looking to get better value for money by appointing a managing agent rather than a solicitor to help them through the RTM process should ensure that the agent takes due diligence with their case. Failure to do so could leave leaseholders with a rejected application, and worse a hefty charge with nothing to show for it.
Leaseholders should ensure that the managing agent has a 100% record of successful Right to Manage applications, as there's really no reason why this shouldn't be the case. We would urge leaseholders to question why any managing agents have anything other than a 100% success rate.
Follow the link for more information about the Right to Manage.
Urban Owners is the pioneering provider of block administration services. Our innovative mix of sophisticated web-based communication and administration tools, professional guidance and onhand support puts leaseholders in control of their block, reducing service charges and improving the services to the block.
We specialise in assisting leaseholders with the management of their block, providing them with the level of support that they choose; from complete outsourcing to Urban Owners to self management using our tool set and advice.
We have a nationwide portfolio of blocks and groups of houses, all of whom have profited from our flexible service and accessible, up-to-the-minute software. With a team comprised of seasoned property professionals, we ensure that as new methods and legislation emerge, we are right on top of them, so that our clients can always count on receiving the most forward-thinking service on the market.
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