Having used this particular right, and completing the steps that were relevant to us as a result of having no freeholder, under s90 of the Commonhold and Leasehold Reform Act 2002 (acquisition date) the RTM Company Directors (and myself) took control of the management functions that should have been directly exercised by the former freeholder.

Note: Under s96 of the Act (management functions under leases) those functions are described as ‘functions with respect to services, repairs, maintenance, improvements, insurance and management.’

Adhering to Leasehold Covenants

A major element of 2002 Act is the requirement to ensure all leasehold covenants are being adhered to. However, with 18 of our 22 flats sublet (with no permission having been granted and flats being handed over to local authorities to house the homeless) even though we had the right of access into the flats for compliance or enforcement of the leasehold covenants, there were the legal issues surrounding the accessing of rented flats which needs to take into consideration under PRS requirements.

Additionally under s101 (tenant covenants: monitoring and reporting) there is also a statutory duty to monitor and review all the leaseholders’ compliance with their covenants and to take steps requiring the remedy of any breaches. Whilst we could sue for debts or seek injunctions for breaches of covenant, (such as repairs or nuisance) at the time we had no freeholder to take the step of forfeiture (which is the ultimate sanction for lease breaches), so this avenue was not open to us.

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