From 3 March 2025, assuming no parliamentary problems, the threshold enabling mixed use buildings to be susceptible to a right to manage (RTM) claim increases from 25% to 50% for non-residential use. This can bring more buildings within the scope of RTM.
In addition, from the above date, the RTM Co or its members will no longer be liable for the costs of the landlord, third party to a lease or a Tribunal appointed manager.
There are of course some limited circumstances in which a RTM Co could be liable for costs. These include the costs of the landlord, 3rd party to the lease or Tribunal appointed manager if all of the following conditions apply: the RTM Claim Notice is withdrawn or ceases to have effect; the RTM Co had acted unreasonably in the giving of the notice or not withdrawing it, causing it to be deemed withdrawn or causing it to cease to have effect; the costs are incurred before the claim is withdrawn; the costs are incurred other than in connection with proceedings before a court or tribunal; and, the costs are reasonably incurred.
As yet, there is no timetable for increasing the non-residential element for collective enfranchisement claims or abolishing the landlord’s ability to recover costs in collective enfranchisement, lease extensions or freehold claims under the Leasehold Reform Act 1967 (as envisaged by Leasehold and Freehold Reform Act 2024).
Seddons partner and head of the leasehold enfranchisement team, John Midgley, says: “This is another milestone towards implementing part of the new law. Yet, for many significant parts of the Act, the can has still been kicked down the road.’’
The above is only a summary of the position. For further information, please contact John at [email protected]