RTM companies

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	RTM companies Jordans is experienced in the incorporation of RTM companies. Our fee is: RTM incorporation: £333.55 plus VAT This covers the cost of the company formation, the supply of the appropriate statutory registers, seal and six bound copies of the draft once the matter were finalised. We will also complete the statutory registers and first board minutes of the company to reflect the initial appointment of officers, admission of members, the company year-end and banker details as part of this service. We can also act as company secretary and provide a registered office address on an on going basis. Our fee is based on a sliding scale: 1 to 4 flats - £400 plus VAT per annum 5 to 25 flats - £500 plus VAT per annum 25+ flats there will be an additional fee of £10 plus VAT per dwelling. This service would relieve you of the time consuming routine obligations demanded by the Companies Act 1985 including matters such as changes to the officers and members, preparing the company’s annual return, dealing with the directors annual retirement by rotation (which is required by the articles) and maintaining the statutory records of the company. RTM companies explained The provisions of the Commonhold and Leasehold Reform Act 2002 (the Act) relating to the statutory right to manage went live on 30 September 2003. The right to manage is a brand new power, which for the first time will allow leaseholders of flats to take over the management of the building in which their properties are situated without the need to show fault on the part of the landlord or pay any compensation for exercising the right. It has been designed to reflect the fact that the freehold of a block of flats can be acquired for a few thousand pounds whereas the value of the properties situated within it will be substantially higher. The Government does not consider it right that a landlord should have complete control over the management when they hold such a relatively small stake in the building. The basic concept is that if half or more of the qualifying tenants want to take over the management of the property they will be able to do so. The property will then be managed by them through an RTM company. An RTM company must be limited by guarantee. Its memorandum and articles of association must match that prescribed by legislation. These are in a long form as Table A of the Companies Act 1985 is specifically disapplied by the Act. This will hopefully make life easier for tenants who will need to refer to only one document when it comes to the constitution of the RTM company. The only information that can be inserted into the draft is the name of the company, which must end with “…RTM Company Limited” and the address of the property in question. The property must consist of a self-contained building or a self-contained part of a building. There must be two or more flats held by qualifying tenants. In addition to this the number of flats held by qualifying tenants must not be less than two-thirds of the units within the property. A part of a building will be deemed to be self-contained if there is a vertical division, the structure is such that it could be developed independently and the services to it (eg those provided by pipes) are provided independently or could be without significant interruption to the other parts of the property. The residents of certain buildings are excluded from exercising the right to manage. These include:- 1. Buildings where the internal floor area of any non-residential part(s) exceeds 25% of the whole floor area; 2. Buildings with self contained parts in different ownership; 3. Premises, which are owned by local housing authorities if they are the immediate landlord of any of the qualifying tenants of flats, contained within the premises. In terms of the membership of the RTM company if there are only two qualifying tenants both must be willing to take part and be admitted to membership. If there are more than two the number of qualifying tenants who are also members of the RTM company must be not less than one half of the total number of flats. A person will be deemed to be a qualifying tenant of a flat if he is the tenant under a long lease. This is a lease for a term of years exceeding 21 years whether or not it is (or may become) terminable before the end of that term (whether by way of notice given by or to the tenant, by re-entry or forfeiture or otherwise). Again, there are certain variations and exclusions from this. It is not possible for a flat to have more than one qualifying tenant at any one time (joint tenants count as a single qualifying tenant). Although there is no need to make an application to a tribunal or court to exercise these rights tenants will need to be aware that a set process, which it is anticipated will take a number of months, will need to be followed and that professional advice will need to be sought at each step of the way. As mentioned above although there is no need to pay the landlord compensation the tenants will have to be prepared to meet the costs of incorporating the company, their legal costs and also the reasonable costs of the landlord. Despite this it is expected that there will be a high take up of the right to manage. Please note that Jordans cannot assist with the actual exercise of the right to manage or in determining whether the property or tenants in question will qualify to exercise the right. As such we do recommend that appropriate legal advice be sought throughout the process where necessary. A good starting point here is the Leasehold Advisory Service (LEASE) whose website can be accessed via the link at the bottom of this page. LEASE is a government funded independent advice agency who has useful information available on the right to manage.

			Contacts
	Click contact name to email Bristol Joe Cressy 0117 918 1336 Karen Bowley 0117 918 1393 London Adrian Brown 020 7400 3304

			See also
	Charitable trading companies Unlimited companies Football Club Companies Northern Ireland Companies Professional practice companies RTE companies

Jordans Limited, Bristol: 0117 923 0600 London: 020 7400 3333 email:customerservices@jordans.co.uk
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Jordans International Limited, Bristol: 0117 923 0600 London: 020 7400 3333 email:customerservices@jordans-international.com
privacy policy | terms and conditions | disclaimer | statutory information