RTM - self management

[Harlequin1]

Small block of 50 rtm flats and considering self management as opposed to using MA . Using an accountant for banking . Service charges , budgets , contracts , financial admin . Any advice please . Anyone doing this

[leaseholder64]

Don't do it unless you are 80%+ owner occupied by empty nesters and and have several surveyors and lawyers amongst those.

In real life you will have difficulty getting one director who actually understands what is needed.

Also don't do unless everything is already running really smoothly (in which case you probably wouldn't have gone for RTM in the first place).

[MrSoffit]

Harlequin1,

Hi again, you sound familiar? You have an RTMC about to take over management if memory of last 24 hours serves? You give me a chance to have a mild rant...

I led the charge to get us RTM about nine years ago. My background was jaded public sector housing with a smattering of applying housing rights law thrown in, so I had no fears having a crack. But unlike the Light Brigade, when I looked behind nobody was holding my coat.

In your situation you have passed all the tough hurdles about exercising the right, now you and other folks have to exercise the responsibility - still RTM. Therein lies the rub.

First, RTM law is a dog's dinner to apply. The RTMC has no funds of its own and is in a shark infested sea. It's all you c\an't do this or you can't do that. I have yet to find a 'professional management agent' we can trust to keep out us out of the dog doo. Fifty flats doesn't sound a project for self management, so you'll need to find one. I hear they exist but they seem very shy.

I don't agree you need lawyers or surveyors, just practical and willing folk to work together. If you find one or two of those among your neighbours you will be well ahead of the caper.

Bear in mind that public and private sector landlords usually have no legal qualifications. I worked for a large HA where from the director down we all had to buy and read law guides and attend seminars to find our way out of the office.

Problem is, leasehold is unregulated. In theory RTM is brilliant, in practice you will likely face the "Dad's Army" resistance of the 'industry' and possibly hostile takeover by some leaseholders with less than your best interests at heart.

If you hope to learn how to run an RTM company from a forum you are in for disappointment. You need to hit google and seek out every term you find. Download and keep research. Make notes. It'll take a lot of time. Need never ends. I still land on case law that opens my eyes to how we've been winging things and we have always had professional agents.

Read some case law too. Try the excellent Amanda Gourlay site "Lawandlease". Free opinion from a barrister, what's not to like. You are a landlord, grasshopper. Presumably you all went for RTM to change your lives. Make it so. If nothing else it'll keep you busy and should save some cash if done correctly. Once you factor in how much annual service charges can reach, not counting endless opportunities for eye watering major works costs, I think RTM is a good return on your invested time. But I came from the background of wanting to make decisions that could affect my wallet.

[Gordon999]

Not sure why you mention using accountant for banking ?

The professional MA should offer a "service standard" complying to the "RICS Residential Management Code" which you can buy from RICS Online Bookshop for about £25. The other service charge code is by ARMA.

MAs usually offer a 1 year fixed contract which can continue subject to 90 days notice to terminate by either side. Its usual for MA to quote a management fee, around £150-£200 / flat.

The MA's main work is service charge administration which includes preparing annual service charge budget for approval by RTMC Directors, collection of service money from the 50 leaseholders and chasing non-payers , getting quotes for annual buildings insurance and electricity supplier , weekly visits by cleaner and gardener etc and placing the order and paying the monthly bills.

After service charge year end, arranging for audit service of the booking keeping and preparation of audited accounts. Making available the records for inspection by any leaseholder with facility to take photocopy. Arranging annual meeting for the leaseholders to approve the accounts and appoint auditor.

Occasionally replying to conveyancing solicitor's enquiries for flats which are for sale. Also some leaseholder disputes may require attending the FTT meetings.

Self -management should not mean the RTMC is managing . It should mean the RTMC appoints one or two leaseholders in the block as MA.

[leaseholder64]

Bear in mind that public and private sector landlords usually have no legal qualifications. I worked for a large HA where from the director down we all had to buy and read law guides and attend seminars to find our way out of the office.

This is why I say you need empty nesters. Those with children will expect to do the job on a man day a year, and simply won't have time to learn the law or the lease.

[Benzo]

Read some case law too. Try the excellent Amanda Gourlay site "Lawandlease". Free opinion from a barrister, what's not to like. You are a landlord, grasshopper. Presumably you all went for RTM to change your lives. Make it so. If nothing else it'll keep you busy and should save some cash if done correctly. Once you factor in how much annual service charges can reach, not counting endless opportunities for eye watering major works costs, I think RTM is a good return on your invested time. But I came from the background of wanting to make decisions that could affect my wallet.

Agree with all this. Her blog has kept me sane, and the quality and amount of advice on that site led us to hire her for our representation - couldn't be happier. She's a shining light in the quagmire of leasehold.