Section 24 Tribunal Appointed Manager
Where a building is being managed badly and the freeholder will not put it right, leaseholders can ask the First-tier Tribunal to take the management away and hand it to someone else. That is a section 24 appointment, under Part II of the Landlord and Tenant Act 1987. Temphis acts as tribunal-appointed manager and works alongside leaseholders and their legal advisers on applications.
Section 24 or Right to Manage?
These are different remedies and people often start down the wrong one.
Right to Manage is no-fault. If the building qualifies and enough leaseholders join, management transfers whether or not anyone has done anything wrong. It is usually faster, cheaper and more certain. See Right to Manage.
Section 24 is fault-based. You have to prove management failure, and the tribunal has to be persuaded that appointing a manager is just and convenient. It is the route where RTM is not available, for example because the building does not qualify, or where the problems are serious enough that leaseholders want an independent manager answerable to the tribunal rather than to themselves.
Who can apply
One or more leaseholders holding a lease originally granted for more than 21 years. A single leaseholder can apply; there is no participation threshold as there is with Right to Manage. In practice a group carries more evidential weight.
The grounds
The tribunal must be satisfied that at least one of the statutory grounds in section 24(2) is made out:
The landlord is in breach of an obligation owed to the leaseholder under the lease relating to management
Unreasonable service charges or administration charges have been made, or are proposed or likely
The landlord has failed to comply with a relevant approved code of management practice
Other circumstances exist that make it just and convenient to appoint a manager
The section 22 preliminary notice
This is the step most self-represented applications get wrong. Before applying, leaseholders must normally serve a preliminary notice on the landlord under section 22. It has to set out:
The applicant name and address, and an address in England or Wales for service
That the applicant intends to apply for an order, and that the application may be withdrawn if the matters are put right
The grounds relied on and the matters supporting them
Where the matters are capable of being remedied, what needs to be done and a reasonable period in which to do it
The tribunal can dispense with the notice, but only where it is satisfied that serving it would not be reasonably practicable. That is a narrow exception, not a convenience.
The just and convenient test
Proving a breach is not enough on its own. The tribunal also has to be satisfied that appointing a manager is just and convenient in all the circumstances, which in practice means showing that an appointment would materially improve how the building is run. Evidence matters more than grievance: accounts, correspondence, inspection reports, compliance records.
Which landlords are exempt
Part II does not apply where the landlord is a local authority, a registered provider of social housing, a fully mutual housing association or certain charitable housing trusts. There is also a resident landlord exemption for converted, non-purpose-built buildings where fewer than half the flats are held on long leases. Checking this first avoids a wasted application.
What the order covers
The tribunal decides the scope. An order will normally set out which management functions transfer, how long the appointment runs, what the manager may charge and recover, what has to be reported and when, and what happens to service charge funds and records held by the outgoing manager. The manager is accountable to the tribunal, not to the landlord and not to the leaseholders who applied, and can go back to the tribunal for directions.
How Temphis acts as appointed manager
We are regulated by RICS, a member of The Property Institute and registered with The Property Ombudsman, and we manage around 1,000 units across 50 buildings. As appointed manager we take over the functions set out in the order: service charge budgeting and accounting through ring-fenced client accounts, compliance and fire safety, contractor procurement and supervision, arrears recovery, and reporting to the tribunal on the terms it sets.
We can also give a view before an application is made on whether the management failures are the kind a tribunal acts on, and provide the evidence of what competent management of the building would look like.
Frequently asked questions about Section 24
What is section 24 of the Landlord and Tenant Act 1987?
It is the power that lets the First-tier Tribunal appoint a manager to take over a residential building where management has failed. It sits in Part II of the Act, alongside the section 22 notice procedure.
Does the freeholder lose ownership of the building?
No. Ownership does not change. Only the management functions listed in the order move, and only for the period the order runs.
Do we have to serve a notice first?
Normally yes. A section 22 preliminary notice must be served giving the landlord the chance to put things right. The tribunal will only dispense with it where service would not be reasonably practicable.
Is section 24 better than Right to Manage?
Usually not, if RTM is available. RTM does not require proof of fault. Section 24 is for buildings that cannot use RTM, or where an independent manager answerable to the tribunal is what is actually wanted.
How long does an appointment last?
Whatever the order says. Appointments are commonly made for a fixed term of a few years, and can be extended, varied or discharged on application.
Can the landlord get management back?
Yes. Either party can apply to vary or discharge the order. The tribunal will look at whether the reasons for the appointment still apply.
Discuss a Section 24 appointment
If your building has serious management problems and you or your advisers are considering an application, we can discuss acting as appointed manager and what the tribunal will expect to see. Get in touch.
