Appointment of a Manager: Tribunal Guide
A comprehensive guide to the appointment of manager process under Section 24 of the Landlord and Tenant Act 1987. Understand how leaseholders can apply to the First-tier Tribunal for a tribunal appointed manager, the grounds for making an application, the steps involved in securing a managing agent appointment, and what happens once a management order is made. Learn how this remedy differs from the right to manage and when it is the most appropriate course of action.
What Is an Appointment of a Manager?
The appointment of manager is a statutory remedy available to leaseholders under Section 24 of the Landlord and Tenant Act 1987. It allows the First-tier Tribunal (Property Chamber) to appoint an independent manager to take over some or all of the management functions of a building where the current landlord or managing agent has failed in their obligations. This is one of the most powerful tools available to leaseholders who are suffering from poor management and have been unable to resolve the issues through other means.
Unlike the right to manage, which is a no-fault process allowing leaseholders to take over management themselves, the appointment of manager route requires leaseholders to demonstrate that there has been a failure in management and that it is just and convenient for the Tribunal to intervene. The Tribunal then selects and appoints a suitably qualified professional to manage the building, and the appointed manager is accountable to the Tribunal for the duration of the management order.
The Section 24 tribunal process is designed to protect leaseholders from landlords or managing agents who are neglecting the building, charging unreasonable fees, failing to carry out essential repairs, or otherwise breaching their obligations. It is a remedy of last resort, typically pursued after other avenues such as formal complaints, involvement of the Property Ombudsman, or attempts to switch managing agent have failed to resolve the problems.
Grounds for Applying to the Tribunal
The grounds on which leaseholders may apply for the appointment of manager are set out in Section 24(2) of the Landlord and Tenant Act 1987. The Tribunal must be satisfied that at least one of these grounds is established and that, in all the circumstances, it is just and convenient to make the order. The following are the principal grounds relied upon in applications for a tribunal appointed manager.
Breach of Obligation by the Landlord
The most frequently relied upon ground is that the landlord is in breach of any obligation owed to the leaseholders under their leases relating to the management of the building. This can include a failure to carry out repairs, a failure to maintain common parts, a failure to insure the building adequately, or a failure to enforce lease covenants. The breach must be established on the evidence, and the Tribunal will consider whether the landlord has been given a reasonable opportunity to remedy it following the service of a preliminary notice under Section 22.
Unreasonable Service Charges or Administration Charges
Leaseholders may apply where unreasonable service charges or administration charges have been made or are proposed or would be likely to be made. This ground covers situations where the landlord or managing agent has been levying charges that are disproportionate to the services provided, where costs have not been reasonably incurred, or where the standard of work does not justify the amounts charged. Evidence of overcharging, poor value for money, or a pattern of excessive demands strengthens this ground. If you have concerns about your charges, our property management complaints guide explains how to raise them formally.
Failure to Comply with a Code of Practice
A further ground exists where the landlord has failed to comply with any relevant code of practice approved by the Secretary of State under Section 87 of the Leasehold Reform, Housing and Urban Development Act 1993. The RICS Service Charge Residential Management Code is the principal approved code. Failure to comply with this code, while not automatically a breach of the law, can be taken into account by the Tribunal as evidence of poor management practice and as a ground for the appointment of manager.
Other Circumstances Making It Just and Convenient
The Tribunal also has a broad discretion to appoint a manager where other circumstances exist that make it just and convenient to do so. This catch-all provision allows the Tribunal to consider the totality of the evidence, including the overall pattern of management, the relationship between the landlord and leaseholders, the condition of the building, and whether the current management arrangements are serving the interests of the leaseholders and the building as a whole.
The Application Process Step by Step
Applying for the appointment of manager through the First-tier Tribunal involves several distinct stages. Each stage is important, and failure to follow the correct procedure can result in an application being rejected or delayed. The following is a step-by-step overview of the Section 24 tribunal process.
Step 1: Serve a Preliminary Notice Under Section 22
Before applying to the Tribunal, leaseholders must in most cases serve a preliminary notice on the landlord under Section 22 of the Landlord and Tenant Act 1987. The notice must identify the grounds on which the application will be made, set out the matters relied upon in support of those grounds, and specify the steps the landlord must take to remedy the issues within a reasonable period, typically not less than 28 days. The notice gives the landlord the opportunity to put matters right before the Tribunal becomes involved. If the landlord fully remedies the problems within the specified period, the need for a Tribunal application may fall away.
Step 2: Make the Application to the First-tier Tribunal
If the landlord fails to remedy the issues identified in the preliminary notice, leaseholders can proceed to make a formal application to the First-tier Tribunal (Property Chamber) for the appointment of manager. The application must be submitted on the prescribed form and accompanied by a copy of the preliminary notice, evidence of service, and supporting documentation setting out the grounds and the evidence relied upon. An application fee is payable to the Tribunal. The application should also identify the proposed manager, including their qualifications, experience, and willingness to act.
Step 3: The Tribunal Hearing
The Tribunal will list the application for a hearing and notify all parties. Both the applicant leaseholders and the landlord have the opportunity to present their case, call witnesses, and submit written evidence. The Tribunal may also inspect the building. At the hearing, the Tribunal will consider whether the statutory grounds are made out, whether it is just and convenient to make the order, and whether the proposed manager is a suitable person to be appointed. The Tribunal process is designed to be accessible, and legal representation is not required, although some parties choose to instruct solicitors or specialist advocates.
Step 4: The Management Order
If the Tribunal is satisfied that the grounds are established and that it is just and convenient to do so, it will make a management order appointing the specified manager to manage the building. The order will set out the functions to be carried out by the appointed manager, the duration of the appointment, the rights and obligations of the manager, and any terms or conditions the Tribunal considers appropriate. The order may also specify the remuneration of the manager and the basis on which it is to be calculated. Once the order takes effect, the appointed manager assumes responsibility for the management of the building in accordance with its terms.
What the Tribunal Considers
When deciding whether to make an order for the appointment of manager, the First-tier Tribunal will consider a wide range of factors. The Tribunal's overriding concern is whether the current management arrangements are failing the leaseholders and the building, and whether appointing an independent manager is the most appropriate remedy in the circumstances.
Management Failures
The Tribunal will examine the evidence of management failures presented by the applicant leaseholders. This includes the condition of the building and common parts, the quality and frequency of maintenance and repairs, the standard of cleaning and communal services, the responsiveness of the managing agent to leaseholder queries and complaints, and the overall standard of financial management. A pattern of persistent failures over a sustained period will carry significant weight, particularly where the landlord has been given the opportunity to improve but has failed to do so.
Breach of Obligations
The Tribunal will consider whether the landlord has breached specific obligations contained in the leases, such as the obligation to maintain the structure and exterior, to insure the building, to keep the common parts clean and lit, or to provide adequate management services. Evidence of breach may include inspection reports, photographs, correspondence showing unanswered complaints, and records of works that have not been carried out. The Tribunal will also consider whether the breaches are ongoing or whether the landlord has taken steps to remedy them since receiving the preliminary notice. If you have documented your complaints, our property management complaints guide explains how to compile and present your evidence effectively.
Just and Convenient
Even where a statutory ground is made out, the Tribunal must also be satisfied that making the order is just and convenient in all the circumstances. This is a broad test that allows the Tribunal to weigh the interests of all parties, including the landlord, the leaseholders, and any third parties. The Tribunal will consider whether there are less intrusive alternatives, whether the proposed manager is suitable, and whether the benefits of appointing a manager outweigh any disadvantages. The just and convenient test ensures that the remedy is proportionate to the problems identified.
Powers and Duties of an Appointed Manager
A tribunal appointed manager assumes significant responsibilities for the building once the management order takes effect. The specific powers and duties of the manager are set out in the Tribunal's order and can be tailored to the particular needs of the building. Understanding what an appointed manager can and cannot do is essential for leaseholders considering this route.
- Collecting service charges, ground rent, and insurance contributions from leaseholders in accordance with the lease terms
- Managing the day-to-day maintenance and repair of the building, including common parts, structure, and exterior
- Procuring and managing contracts for cleaning, gardening, security, and other communal services
- Arranging buildings insurance and ensuring the building complies with all relevant safety regulations
- Preparing and distributing annual service charge budgets and year-end accounts to leaseholders
- Holding service charge funds in designated trust accounts and maintaining proper financial records
- Enforcing lease covenants on behalf of the building, including taking action against breaches by individual leaseholders
- Reporting to the Tribunal as required and complying with any directions or conditions set out in the management order
The appointed manager is a professional, usually a member of RICS or another recognised professional body, who owes duties both to the Tribunal and to the leaseholders. They are expected to manage the building to a high standard and in accordance with the RICS Service Charge Residential Management Code. If leaseholders are dissatisfied with the performance of the appointed manager, they can apply to the Tribunal to vary or discharge the management order. For more information about what to expect from professional property management, see our guide on how to switch managing agent.
Costs and Duration of a Management Order
Understanding the financial implications and the likely duration of a management order is important for leaseholders considering an application for the appointment of manager. While the process is designed to be accessible, there are costs involved at each stage, and the duration of the order will depend on the circumstances of the case.
Application Costs
The Tribunal charges a fee for processing an application for the appointment of manager. As of the current fee schedule, the application fee is modest compared to county court proceedings. Leaseholders may also incur costs for preparing the application, gathering evidence, and drafting the preliminary notice under Section 22. While legal representation is not required, some applicants choose to instruct a solicitor or a specialist leasehold enfranchisement practitioner, which will add to the costs. The Tribunal has the power to make orders as to costs in limited circumstances, but as a general rule each party bears their own costs.
Manager's Remuneration
The tribunal appointed manager is entitled to reasonable remuneration for their services, and the basis for this remuneration will be set out in the management order. The manager's fees are typically paid from the service charge, meaning that leaseholders fund the cost of management through their regular contributions. The Tribunal will ensure that the proposed remuneration is reasonable and proportionate to the size and complexity of the building. In many cases, the cost of a managing agent appointment by the Tribunal is comparable to the fees that would be charged by any competent managing agent in the open market.
Duration of the Order
The Tribunal has broad discretion to determine the duration of a management order. Orders are commonly made for periods of between two and five years, depending on the severity of the management failures and the complexity of the building. At the end of the order period, the management of the building reverts to the landlord unless leaseholders apply for a new order or pursue an alternative route such as the right to manage. Either party may apply to the Tribunal to vary or discharge the order before it expires if there has been a material change in circumstances. The Tribunal can also extend the duration of an existing order if it is satisfied that continuation is just and convenient.
Frequently Asked Questions About the Appointment of a Manager
What is the appointment of a manager under Section 24?
The appointment of a manager under Section 24 of the Landlord and Tenant Act 1987 is a legal remedy that allows leaseholders to apply to the First-tier Tribunal (Property Chamber) for an independent manager to be appointed to take over the management of their building. This power exists because Parliament recognised that leaseholders may be subject to poor or neglectful management by their landlord or managing agent, and that in some cases the only effective solution is for the Tribunal to intervene and appoint a suitably qualified manager to run the building properly. The appointed manager takes over the management functions specified in the Tribunal order and is accountable to the Tribunal rather than to the landlord. This remedy is distinct from the right to manage, which does not require proof of fault.
What are the grounds for applying for a tribunal appointed manager?
The grounds for applying for a tribunal appointed manager are set out in Section 24(2) of the Landlord and Tenant Act 1987. The most commonly relied upon ground is that the landlord or managing agent is in breach of an obligation owed to the leaseholders under their leases, and that it is just and convenient to appoint a manager in all the circumstances. Other grounds include that unreasonable service charges or administration charges have been made or are proposed, that the landlord has failed to comply with a relevant code of practice approved by the Secretary of State, or that the landlord has failed to comply with duties relating to the management of the building. Leaseholders do not need to prove every ground but must demonstrate at least one ground is met and that appointment of a manager is just and convenient.
Do I need to serve a preliminary notice before applying to the Tribunal?
Yes, in most cases you must serve a preliminary notice on the landlord under Section 22 of the Landlord and Tenant Act 1987 before making an application to the First-tier Tribunal for the appointment of a manager. The preliminary notice must specify the grounds on which the application will be made, the matters relied upon in support of those grounds, and the steps the landlord must take to remedy the problems within a reasonable period. The notice period is typically a minimum of 28 days. If the landlord remedies the issues within the specified period, the application may no longer be necessary. However, the Tribunal has the power to dispense with the requirement for a preliminary notice in certain circumstances, for example where the landlord cannot be found or where there is an urgent need for intervention.
How long does a management order last?
The duration of a management order is determined by the First-tier Tribunal and can vary depending on the circumstances of the case. There is no fixed statutory period, and the Tribunal has wide discretion to set the term it considers appropriate. In practice, management orders are commonly made for periods of between two and five years, although shorter or longer periods are possible. The order will specify the start and end dates, and either party can apply to the Tribunal to vary or discharge the order before it expires if circumstances change. At the end of the order period, leaseholders can apply for a new order if the grounds for appointment still exist, or the building may revert to management by the landlord or a managing agent of the landlord choosing. The Tribunal will consider all relevant factors when deciding the duration.
Can the landlord oppose the appointment of a manager?
Yes, the landlord has the right to oppose the appointment of a manager and to make representations to the First-tier Tribunal at the hearing. The landlord may argue that the grounds relied upon by the leaseholders are not made out, that any breaches have been remedied following the preliminary notice, that the proposed manager is not suitable, or that appointing a manager would not be just and convenient in all the circumstances. The landlord may also present evidence of steps taken to improve management standards or to address the complaints raised by leaseholders. The Tribunal will consider all representations from both sides before making its decision. Where the landlord can demonstrate that genuine improvements have been made and that the management failures are unlikely to recur, the Tribunal may decide that an appointment is not necessary. However, a pattern of persistent failures will weigh heavily against the landlord.
What is the difference between appointment of a manager and the right to manage?
The appointment of a manager under Section 24 of the Landlord and Tenant Act 1987 and the right to manage under the Commonhold and Leasehold Reform Act 2002 are two distinct legal routes for leaseholders seeking to change the management of their building. The right to manage is a no-fault process that allows qualifying leaseholders to take over management through a Right to Manage company without needing to prove any management failures. In contrast, the appointment of a manager requires leaseholders to demonstrate that the landlord or managing agent has failed in their obligations and that it is just and convenient for the Tribunal to intervene. The right to manage transfers management to the leaseholders collectively, whereas an appointment of a manager places management in the hands of an independent professional chosen by the Tribunal. Each route has advantages and the best option depends on the specific circumstances of the building.
Need Help With the Appointment of a Manager?
Whether you are a leaseholder considering an application for the appointment of manager under Section 24, a director seeking advice on how a tribunal appointed manager would affect your building, or a freeholder responding to a preliminary notice, Block is here to help. We have extensive experience acting as appointed managers and advising leaseholders and directors on the First-tier Tribunal manager process. Contact us to discuss your situation and explore your options, including the right to manage as an alternative route.