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. The manager the tribunal appoints is an officer of the tribunal: they do not act for the landlord, and they do not act for the leaseholders who applied.
This page explains when the tribunal will appoint a manager, how an application runs, and what the tribunal expects of the person proposed for the job. Temphis accepts nominations as proposed manager and works with leaseholders and their legal advisers on the management side of an application.
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.
Section 24 is fault-based, or at least circumstance-based. You have to persuade the tribunal 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 an independent manager answerable to the tribunal is what is actually wanted rather than management by the leaseholders themselves. If you are weighing the two, our guide to RTM and RMC structures sets out how each one works day to day.
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 have been made, or are proposed or likely
Unreasonable variable administration charges have been made or are proposed
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
When the tribunal will appoint a manager
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.
The last ground is wider than it first looks. It does not require a villain. A resident management company or RTM company whose board has deadlocked, where leaseholder-directors cannot agree a budget, appoint a contractor or sign off accounts, can leave a building drifting with nobody in a position to act. Where that deadlock is doing real damage to the building, an independent manager answerable to the tribunal is one way out of it, and the tribunal has power to make an order even though the people running the company are the leaseholders themselves.
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.
How an application runs
Once the notice period has run without the problems being put right, the application itself is made to the First-tier Tribunal (Property Chamber) on Form Leasehold 2, which is also the form used to vary or discharge an existing order.
The tribunal then issues directions. These set the timetable: statements of case, the evidence each side must file, the documents to be disclosed, the proposed manager's evidence and management plan, and the bundle. Directions are not advisory. Late or partial compliance is the most common reason an otherwise good application struggles.
Most cases are decided at an oral hearing, usually after an inspection of the building. The proposed manager is expected to attend and to be able to answer questions on the plan, the budget and the state of the building.
What the tribunal expects from a proposed manager
The Property Chamber sets this out in its practice statement on the appointment of managers under section 24, first issued in July 2023, which also contains the tribunal's draft management order. Anyone thinking of naming a manager in an application should read it before choosing one. In summary, the tribunal looks for:
Standing and experience. Membership of a professional body at a level of seniority matching the responsibilities, a reasonable period of experience as a manager, and familiarity with the relevant codes of practice. The tribunal will not usually appoint a leaseholder as the manager.
Full compliance with the directions, filed on time. The proposed manager's evidence is part of the timetable, not an afterthought bolted on before the hearing.
A written management plan. It should cover the handover from the current manager and its timetable, the service charge accounts and bank arrangements, health and safety and fire safety measures, staffing and the time to be committed, day-to-day management, a prioritised schedule of remedial work, proposals for collecting arrears, the professional advisers to be used, how leaseholders and the landlord will be communicated with, and the proposed remuneration. A plan that stops at the first few months of the appointment does not answer the question the tribunal is asking, which is how the building will be run for the whole of the proposed term.
An inspection and a proper reading-in. The proposed manager is expected to have inspected the property, read the tribunal papers and the leases, and considered the draft management order before the substantive hearing. Reviewing the accounts and the arrears position is part of that: the plan has to be affordable from the service charges the building can actually raise.
Independence. The manager acts as an officer of the tribunal and must act independently of the parties, avoiding anything the average consumer would regard as conflicting with the duties under the order. Previous section 24 cases in which the manager was nominated by any party must be disclosed, including ones still running.
Professional indemnity insurance. Cover appropriate to the building and extensive enough for the work under the order. The tribunal's draft order specifies a minimum of £2 million, with the certificate stating that the cover applies to the manager's duties as a tribunal-appointed manager. Cover that is silent on tribunal appointments is a problem.
Client money protection and a complaints procedure. Membership of a client money protection scheme, and a complaints procedure in line with the RICS requirements.
A clear fee schedule. Management fees, and any additional charges, set out so the tribunal and the leaseholders can see what the appointment will cost.
Typical terms of a management order
The tribunal decides the scope, and no two orders are identical. The draft order in the practice statement gives a good idea of the shape:
Duration. A fixed term with defined start and end dates, ideally ending with a service charge year. Terms of three to five years are common where major works are in prospect, because a shorter appointment cannot see a section 20 consultation and the works themselves through.
Funding. An initial payment to get the appointment off the ground, since the manager usually inherits no funds and may inherit arrears.
Sinking fund powers. The order can give the manager authority to establish a reserve or sinking fund and to demand payments in advance whether or not the leases provide for it.
Arrears recovery. Authority to collect service charges and insurance contributions under the leases, to bring or defend proceedings relating to management, and to recover the reasonable fees of surveyors, solicitors, accountants and other professionals.
A Form L restriction at HM Land Registry. Entered against the landlord's title so that a successor in title is bound by the order. The manager applies for it within 14 days of the order.
Reporting. A first report no later than six months from appointment and annually after that, with a final report no later than 56 days before the end date.
Handover at the end of the term. Final closing accounts within two months of the end date, and unexpended money returned within three months, or as the tribunal directs if there is a dispute.
Co-operation from the landlord. Access, keys, passwords, and the delivery up of accounts, books, records and funds relating to the property within set periods.
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.
How Temphis approaches a nomination
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. Our block management service and our approach to taking over a building describe the day-to-day work an order would put in our hands.
Where we are asked to be named as proposed manager, we work to the practice statement rather than around it. That means inspecting the building, reading the leases, the accounts and the arrears ledger before committing to anything, producing a management plan that covers the whole proposed term, confirming our independence from every party, holding professional indemnity cover that extends to tribunal appointments, and giving a fee schedule the tribunal can test. If the building cannot support the plan, or if the problems are not the kind a tribunal acts on, we will say so before an application is made rather than after.
We can also give a view on whether Right to Manage is the better route, and on what a well-founded service charge challenge would look like where the real complaint is about cost rather than competence.
Frequently asked questions about section 24
What is a tribunal-appointed manager?
A manager appointed by the First-tier Tribunal under section 24 of the Landlord and Tenant Act 1987 to take over management of a residential building. They act as an officer of the tribunal, independently of the landlord and of the leaseholders who applied, and carry out the functions listed in the management order.
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.
Can a manager be appointed where the RTM company board is deadlocked?
It is possible. The tribunal can appoint where other circumstances make it just and convenient, which does not require fault by a landlord. A board that cannot agree a budget or sign off accounts, to the detriment of the building, can fall within that.
What does the tribunal expect from a proposed manager?
Relevant professional standing and experience, compliance with the directions, an inspection of the property and a reading of the leases and papers, a management plan covering the whole proposed term, independence from the parties, professional indemnity insurance of at least £2 million that expressly covers tribunal appointments, client money protection, a complaints procedure, and a clear fee schedule.
How long does an appointment last?
Whatever the order says. Terms of three to five years are common where major works are needed, and an order can be extended, varied or discharged on application by either party.
Discuss a section 24 appointment
If your building has serious management problems, or your board has reached deadlock, and you or your advisers are considering an application, we can discuss being named as proposed manager and what the tribunal will expect to see. More general questions are answered on our FAQs page, or you can get in touch directly.
