Changes to right to manage in mixed use blocks

People living in blocks which contain shops or other commercial use as well have always had the potential to obtain the right to manage the residential part of the block – subject to restrictions.  But the Government has just given three bonus balls to flat owners in mixed use blocks:

Firstly, if the space occupied by commercial tenants exceeds 25% of the whole block, that used to prevent the claim being made. Now it has to exceed 50%. There are countless terraces of flats above shops in our inner cities and suburbs, typically with three or four residential floors above a shop with a ground floor and basement: Before this month, that would have been enough to prevent the flat-owners claiming the right to manage their own properties. Now it won’t.

Secondly, although the changes could have resulted in the commercial tenants being awarded a much higher number of votes in the new Right to Manage company, new rules cap the votes given to commercial tenants at one third of the whole, so that they will never be able to interfere in the day to day running of the residential part of the block.

Thirdly, except in a very few cases, the landlord is no longer allowed to charge the flat-owners for his own legal costs in connection with an RTM claim being against him. So the costs have just come down.

Our Residential Property team has considerable experience in this specialist area of law. For further information on this topic, please contact any member of the Residential Property team.