What is a managed leasehold?

A managed leasehold is looked after by a third party leasehold management company who provide the services normally handled by the landlord. This always includes service charge collection and general maintenance but can include providing staff to look after the building and is sometimes closer to a 'serviced' property.

What does it mean to be a member of a management company?

Members of a management company can vote to appoint and remove the Directors. The Directors deal with day to day management of the freehold.

A block of leasehold flats against a clear sky. SAM Conveyancing explain: What is a Leasehold Management Company and how you can get rid of one

Speak to a member of our team to get a quote for specialist solicitor support with your section 22 notice to the landlord.

We can help you get a new manager appointed and support at Tribunal if required.

What is a Leasehold Management Company?

by:

Caragh Bailey

Last Updated: 29/05/2024

Read by:

620

5 min read

Key Takeaways

A leasehold management company takes on the roles and responsibilities of the landlord
It is possible to get rid of a leasehold management company if you can prove poor management, or you qualify for the 'Right to Manage' or for Collective Enfranchisement.
Members of a management company have relatively little power over day to day management of the building.

The Leasehold and Freehold Reform Act 2024 was passed on the 24th May 2024, but is not fully enforced yet and the date for this is not yet clear. We will update our content as and when the finalised legislation is published.

If you own a leasehold you will be familiar with the basics: the freeholder owns the entire freehold and the leaseholders must pay a mandatory service charge to the freeholder, who must use the funds to carry out their obligations under the lease, including maintenance and upkeep of the building and common areas.

What are the responsibilities of the leasehold management company?

In many cases, the freeholder will appoint a leasehold management company to handle their responsibilities as landlord, which generally include:

Maintaining the structure, walls and roof
Maintaining communal hallways, pathways and car parks
Cleaning, gardening and window cleaning
Onsite facilities: gates, lifts, smoke/fire alarms
Risk assessments: Fire and H&S

All property management companies are also responsible for:

Preparing annual accounts
Invoicing and collecting service charges
Building and Public Liability Insurance
Company secretarial responsibilities
Dealing with sales of leaseholds and breaches of lease
Chasing and collecting arrears

What is the difference between management company and freeholder?

The freeholder owns the building, and is responsible for its management, maintenance and repair. If they appoint a management company, they pass on those responsibilities to this separate legal entity who will become a third party in the lease.

What is the point of a leasehold management company?

It is simply an outsourcing of the management role. The leasehold management company are responsible for managing the service charge and delivering the services. The freeholder is relieved of the responsibility of managing the building and the leaseholders have a dedicated management company, who is ideally more responsive and available than they may find if dealing directly with the freeholder.

Can you get rid of a management company?

Unfortunately not all management companies are created equal. If you have a bad management company or simply want to take more ownership of the management of your building, you have three options as a leaseholder.

Apply to Tribunal to appoint a new manager

If you are able to prove poor management you can apply to tribunal to let you appoint a new leasehold manager; for example, the service charges are unreasonable, or there has been a breach of the approved code of management practice.

You must first serve a Section 22 Notice to the landlord, which gives them an opportunity to resolve the issue themselves. You will not be able to submit your dispute to Tribunal if you haven't completed this stage. Get in touch if you would like specialist legal support with your Section 22 Notice, or any part of the Tribunal process.

Contact Us

This option can replace a bad manager with a better one and does not require the leaseholders to take on any additional responsibility. Likewise, you will not gain any additional control.

Exercise your 'Right to Manage'

If you qualify for the Right to Manage (RTM) you can take over the management of certain responsibilities yourselves by forming an RTM Company, or by participating in a Resident's Management Company (RMC). As an RTM Company, you can appoint a leasehold management company of your own choosing. (We recommend you appoint a professional management company if there are more than 6 dwellings, as it can involve a lot of extra work). You may even choose to keep the existing management company, under your own direction.

Do we qualify for the right to manage?

At least two-thirds of the flats must be let to 'qualifying tenants'. This means their lease must have been granted for an original terms of more than 21 years. They do not have to have ever lived in the flats and can own any number of properties. The total number of participating qualifying tenants must represent at least half the number of flats.

No more than 25% of the total floor area (excluding common parts) may be non-residential.

You cannot be eligible for the right to manage if:

The immediate landlord of any qualifying tenant is a local housing authority.
The Resident Landlord Exemption applies:

The premises are not a purpose built block; and there are no more than 4 separate flats; and one of the flats is occupied by the freeholder or an adult family member as their principal home for the past year.

In larger estates: each building or block must qualify separately and serve an individual notice for each qualifying building.

This option comes with responsibilities and a certain level of control over the management of the building. You will still have to answer to the landlord and your fellow leaseholders, as well as meet your statutory and contractual obligations.

Collective Enfranchisement

Collective enfranchisement is the purchase of the freehold by some or all of the leaseholders. Like the RTM, you must qualify for the right to buy the freehold. For multi-dwelling buildings, you and the other participating leaseholders purchase the freehold together and each own a share of the overall freehold.

Things work differently if you want to buy the freehold of a leasehold house. It is possible that you may own the freehold and still be subject to management under a freehold management company.

This option gives you collective ownership and control of the building and how you choose to manage it. It comes with the greatest power and responsibility. You will not have a landlord to answer to but you must cooperate with the other shareholders to meet your statutory and contractual obligations to your fellow leaseholders.

Free Initial Leasehold Advice

Arrange a free consultation with one of our experienced conveyancing executives on:

Lease extension.
Purchasing the leasehold, freehold or share of freehold.
Selling a leasehold property with a short lease.
Extending the lease at the same time as you sell.

We specialise in lease extensions and have RICS valuers for the premium/negotiation and solicitors for the section 42 notice and formal or informal extension. Request a tailored quote for:

RICS Lease Extension Valuation or L2 Homebuyers Survey.
Serving of the section 42 notice or section 13 notice on the freeholder.
Negotiation with the freeholder (with the support of your RICS valuer).
Completion of the legal work, including deed of variation.
Application to Tribunal to determine the premium.
Vesting order for absent landlords.

Frequently Asked Questions: Leasehold Management Company

ManagedLeasehold

Member

Written by: Caragh Bailey

Caragh Bailey is a Lead Property Content Specialist at SAM Conveyancing, having joined the firm in 2020. With a portfolio of over 150 technical conveyancing, house survey and mortgage guides, she has become a primary authority on the end-to-end sale and purchase process.

Caragh specialises in complex legal workflows, including Help to Buy redemptions, equity transfers, shared ownership structures, trust deeds for tax planning, and joint ownership disputes. Her expertise extends to leasehold reform and RICS home surveys, where she provides clear, factual guidance on independent legal advice for specialist mortgage products and intricate ownership structures.

Reviewed by: Andrew Boast

Andrew Boast FMAAT is a qualified accountant, conveyancing specialist and author with over 25 years of experience in the UK property sector. Since beginning his career in 2000 within established SRA and CLC-regulated conveyancing solicitor firms, Andrew has overseen the legal journeys of more than 75,000 clients.

He is the author of the property guide 'How to Buy a House Without Killing Anyone' and a frequent contributor to mainstream UK media on legislative updates, property law, first-time buyer guides, conveyancing best practices, and stamp duty changes. Andrew specialises in resolving complex title issues, property conflict disputes, and property tax options, streamlining the enquiry process to reduce transaction times and maintaining a client-friendly focus.

People also searched for