Why you need Right to Manage Insurance
Right to manage insurance, also often referred to as RTM insurance, is the name used for buildings insurance for properties that are managed under a right to manage company. Usually, individuals (leaseholders) who own properties within a block of flats, will be responsible for insuring their own contents, whereas the owner of the building (landlord) is often responsible for the insurance of the actual building and communal areas. Landlords will often require the leaseholders to contribute to these costs through payment into a 'sinking fund' or service charge.
When leaseholders decide to take over the management of the property from the landlord, forming a right to manage company, is when they will require right to manage insurance to cover the building.
RTM insurance is relevant to flats and apartments and other properties that are owned under the terms of the The Housing (Right to Manage) Regulations 1994 and which need to be insured on behalf of Tenant Management Organisations. RTM insurance is effectively buildings insurance, protecting the property managed by the Right to Manage company.
Who can set up a right to manage company?
Most leaseholders can set up an RTM company; there are a few stipulations, however:
- The building must be self-contained
- The building must have at least two flats
- Have two-thirds of the flats owned by ‘qualifying tenants’,
Why purchase right to manage insurance?
Unfortunately, it is not uncommon for landlords to add as much as 50% to the cost of insuring a block of flats or apartments. Insuring the building through an RTM company allows the leaseholders to choose their own provider, as well as pay the insurer directly. This can often result in significant savings. By forming an RTM company, you have effectively taken over the management functions of the block, or blocks, of flats, including arranging insurance for the buildings.
What does right to manage insurance cover?
Policies might vary but most RTM policies will include:
- The building itself
- Fixtures and fittings
- Alternative accommodation
- Public liability
- Property owners' liability
- Employer's liability
Commonhold and Leasehold Reform Act 2002
The Right to Manage principle was first provided under the terms of the Commonhold and Leasehold Reform Act 2002 and gives leaseholders the chance to have a far greater control of how their Right to Manage flats and apartments are run.
Invaluable advice is also available from the Leasehold Advisory Service and a copy of their excellent 'Right to Manage' guide is available to download . Please click here to download.
How can QuoteRack help?
RTM Companies looking for buildings insurance
Buildings insurance for RTM flats is a highly specialised area of property insurance and QuoteRack is delighted to offer Right to Manage flat and apartment owners the opportunity to receive a quotation for 'Right to Manage' property insurance from an expert insurance intermediary who specialises in this type of buildings cover.
Right to Manage Property - Resources
Leasehold Advisory Service
A document from the Leasehold Advisory Service offers Invaluable advice and a source of information for those considering Right to Manage action.
DirectGov
Further details about how your RTM application may ultimately be progressed and/or resolved
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"It was the level of service charge that eventually brought most of the flats leaseholders to the point where we decided to go down the right-to-manage route. We're so glad we did and now we are fully in control of our own property, buildings and freehold"
"The Commonhold and Leasehold Reform Act 2002 has meant that most owners and tenants of flats and apartments have the right to manage their own property to a far greater extent, and often more efficiently, than the original freeholder"