The Leasehold Advisory service (LEASE) report a growing number of calls from resident leaseholders who are trying to improve their building or the way it is managed but come unstuck because buy to let owners are not willing to participate in exercising the leaseholders’ right to manage the building.

The right to manage enables leaseholders to appoint their own choice of managing agent. There are a few hurdles to jump in exercising the right to manage, but it is not particularly onerous, especially if there is a group of resident leaseholders leading the project.

Nicholas Kissen, Senior Legal Adviser at LEASE, the government funded service which provides free legal advice on leasehold matters, says one of the easiest ways for buy to let landlords to protect their investments is to work with leaseholders who have a real interest in improving the building. In many cases all that may be required is for the landlord to agree to the process.

Leasehold flats can look like the ideal buy to let investment. They are often in urban locations where demand for rented property is high and all the maintenance work is undertaken by the freeholder and managing agents.

In an ideal world the tenants cover the costs and all a landlord has to do is sit back and wait while your asset increases in capital value. But few investor landlords can afford to have void periods so there is a vested interest in taking a more proactive interest in the property to ensure that it remains attractive to potential tenants.

The right for leaseholders to manage a building themselves is an absolute right and cannot simply be denied. The Commonhold and Leasehold Reform Act 2002 provides a right for leaseholders of flats to force the transfer of the landlord’s management functions to a special company set up by them - the right to manage (RTM) company. There is no need to prove that the landlord has done anything wrong – the right to manage is there for the taking whether the landlord's management has been good, bad or indifferent.

One of the major motivations may be to save money on maintenance and repair works. While this is a sensible objective, the RTM company must adopt a responsible attitude to the long-term maintenance aspects - the building remains in the landlord's ownership and the flats remain the leaseholders' principal financial assets.

Exercising the right to manage starts with leaseholders' issuing an invitation to all qualifying leaseholders to become members of the RTM company and continues with the service of formal notice on the landlord and provided the claim is not opposed after a set period of time, the management transfers to the right to manage company (the RTM company) which has been set up by the leaseholders. Once the right to manage has been acquired, the landlord is also entitled to membership of the company.