Automatic RTM, the challenges

It is sometimes proposed that each block of flats in England & Wales should automatically have Right To Manage.

I have long been a proponent of slashing the barriers to RTM.

Status quo: company law, 50% threshold

The current RTM system, established in legislation in 2002, is based on standard company law. I have written elsewhere on how in the UK, company law gets more practical support from the legal system than alternatives:

Collective ownership structures for British apartment blocks

Requirements

• There needs to be a legal entity which takes over either the management functions of the leases, or the power to choose an agent to do so on its behalf.
• Any such body requires legal personality, that is, to be able to sue and be sued, own property, enter contracts and have a bank accout.
• The body needs to be under the control of the leaseholders in the building

Membership and consent

TBD (there is a genuine problem with forcing people to be a member of a company they never consented to join; in particular it would derogate from ECHR A11 and the Companies Act's definition of company member as being predicated on consent. But there's the extremely practical question of how a company can record a service address for a member on its register without the consent of the putative member him/her/itself.)

What Could Be Done

• identify the set of cases where RTM (even with single member RTM companies) is unavailable, i.e., the "residuum"
• use an adaption of parish meetings (see the Local Government Act 1972) to provide for an automatic legal entity that does not require consent, to allow some kind of formalised collective action within the residuum; call this body the Trustees of the Statutory Tenants Meeting of Name of Block of Flats
• restrict this to the residential parts of blocks of flats, and some other buildings (see the late 2024 case where courts invented "sections" for RTM in mixed-use blocks)
• restrict it also along the lines of Firstport v Settlers Court, so that it doesn't end up with the usual estate management problems
• there will need to be a system for estates too - to come later
• empower the Statutory Tenants Meeting to put the managing agent's contract out to tender, with some maximum frequency, e.g., 3 years

The Power to Appoint Managing Agents