Appointment of a Manager

Appointment of a Manager

Sometimes, the Right to Manage (RTM) is unavailable because:

• the building does not qualify; or
• not enough leaseholders are willing to act collectively.

Alternatively, if the leaseholders already own and control the freehold/management company, RTM would not result in the management changing.

Section 24 Landlord and Tenant Act 1987

Section 24 of the Landlord and Tenant Act 1987, entitles dissatisfied leaseholders to ask the First Tier Tribunal to appoint a manager in place of the landlord or existing management company.

Unlike RTM, this is a fault-based remedy. As such, to succeed, leaseholder applicant(s) must demonstrate as many of the following as possible:

• The managing party has breached the lease.
• Unreasonable service charges or administration charges are demanded or proposed.
• The managing party has breached a Code of Practice approved by the Secretary of State.
• It would be just and convenient in the circumstances to appoint a Manager.

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Is the appointment of a manager right for you?

There are a number of issues to consider before deciding whether applying for the appointment of a manager is the right step for you. These include:

• Legal fees are usually higher than for an RTM claim. This is because of the requirement for an application to the Tribunal and the need to prove your case, particularly if the existing managing party contests your application.
• There is no certainty of success. You must establish that it would be just and convenient to appoint a manager. It is important to appreciate that appointment of a manager is considered a draconian remedy. Consequently, it is not sufficient simply to show the existing managing party could do better.
• If you are successful, the manager appointed by the Tribunal has a duty to the Tribunal over and above that owed to the leaseholders. The manager must act in the best interests of the building containing the flats, not the leaseholders who made the application.
• The Tribunal may give the new manager powers beyond those of the existing managing party. For example, if there are defects in the lease, the Tribunal could grant powers to the manager which solve the problems.
• Service charges might not decrease and could even increase following the appointment of a manager.