HC Deb 27 November 2002 vol 395 cc357-8W
Mr. John Taylor

To ask the Deputy Prime Minister whether, in the context of the Commonhold and Leasehold Reform Act 2002, existing and properly constituted management limited companies may convert themselves into RTMs, limited by guarantee, by special resolution; and what guidance he has issued on the changes that might need to be made to their memoranda and articles: [82544]

Mr. McNulty


Section 73(2) of the Act specifies that a company is a Right To Manage (RTM) company in relation to premises if: it is a private company limited by guarantee, and its memorandum of association states that its object, or one of its objects, is the acquisition and exercise of the right to manage the premises.

Section 74 of the Act provides a power to prescribe the Memorandum and Articles of Association for a RTM company, and we are currently consulting on the form this prescription should take.

Once the draft regulations have been finalised and brought into force, an existing company limited by guarantee could, by special resolution under the Companies Act 1985 change its objects clause to include the RTM object and adopt the prescribed Memorandum and Articles. In addition, the regulations may provide that certain of the prescribed memorandum and articles will have effect for an RTM company irrespective of whether or not it has adopted them.

However, in order for a RTM company to actually exercise and acquire the right to manage for a building, the membership of that company and the premises itself must meet the qualifying conditions as laid down by sections 72–75 of the Act.

Finally, while we have yet to produce guidance on RTM this will be available when the RTM provisions come into force. It will include all aspects of exercising and acquiring RTM.

Mr. John Taylor

To ask the Deputy Prime Minister when he intends to introduce regulations bringing Part 2 of the Commonhold and Leasehold Reform Act 2002 into operation. [82545]

Mr. McNulty

The first tranche of regulations on leasehold reform came into force on 26 July this year, making it is easier for leaseholders to buy the freehold of their property, extend their leases and seek the appointment of a new manager in tripartite leases.

The Office of the Deputy Prime Minister proposes to make and lay the remaining regulations on Leasehold Reform in two stages, in spring and autumn 2003. Regulations on right to manage, safeguards against forfeiture, new powers for leasehold valuation tribunals and changes relating to contracts and major works will be laid in spring and should be operational by summer 2003. Regulations on accounting procedures will be laid by autumn next year and operational three months later.