If an RTM company successfully acquires an RTM, it assumes the ‘management functions’ for the premises over which it has acquired the RTM. Management functions are functions that a landlord or other party (other than a tenant) has with respect to:
(Section 96(5), CLRA 2002.)
Essentially, a landlord, a management company or manager appointed under Part II of the LTA 1987 is divested of their management functions under the lease with the exception of functions relating to:
- A matter concerning only a part of the premises consisting of a flat or other unit not held under a lease by a qualifying tenant
- Re-entry or forfeiture
(Section 96(6), CLRA 2002.)
So, in the case of buildings containing flats under the control of the landlord, or commercial units, the management functions obtained through the RTM will not extend to those flats or units.
It is important to note that the RTM company does not have to manage the building itself. It acquires the right to direct the management of the building. The RTM company is free to appoint its own managing agents or appoint those acting on behalf of the landlord.