Research undertaken in 2005 by the Association of Residential Managing Agents (ARMA), shows that in the first year of operation only 334 RTM companies were formed, which, it is estimated, only represents 0.5% of all blocks of flats in England and Wales.
Not surprisingly the main reason given by respondents to the survey for wishing to exercise RTM was their dissatisfaction with the standard of the freeholder’s management arrangements. A quarter of respondents were looking to self-manage but the majority just wanted to be able to appoint their own managing agent who would take instructions from them, not the freeholder.
Virtually all respondents found it easy to form the prescribed RTM company and gain the support of sufficient qualifying lessees, but nearly a half reported that their freeholders proved obstructive during the process. Concerningly, though, a large minority of respondents admitted that in exercising their right to take control they did not prepare a business plan or budget.
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Despite the low number of RTMs that have been formed, 84% of respondents said that the exercise of this new power had been successful. However, there was a consensus amongst many of those responding that it had been hard work, particularly as there was often little active support from lessees.
“This lack of active support is a concern”, says David Hewitt of ARMA, “as it can lead to serious problems if the ‘drivers’ of this process subsequently stand down as directors. It is for this reason ARMA and LEASE, the Leasehold Advisory Service; believe that, unless the building is small, the day to-day management may be best left to a professional managing agent who can provide the continuity.”
David Hewitt also points “the appointment of a managing agent frees up the lessees to enjoy their homes, avoids lessees becoming involved directly with disputes with neighbours and reduces the personal time that lessees would otherwise have to give in managing the property themselves”.
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