A TMO is created when residents (tenants and
leaseholders) in a defined area of council homes create a
corporate body and, typically, elect a management committee to run the body. This body then enters into a formal legal contract between the landlord of the home(s) and the council, known as the management agreement. This agreement outlines the services a TMO is responsible for and what services the council is responsible for. The services provided by TMOs are funded by the management allowances paid by the Council under the agreement. Such allowances should approximate to the sums the landlord would have spent to deliver the services had they remained under the direct provision of the landlord. They may therefore differ between TMOs who fall under different council landlords. Before any management agreement can be approved by government, the TMO must be approved as competent via an independent assessment overseen by the Ministry of Housing, Communities and Local Government (MHCLG) which holds an approved list of assessors capable of undertaking such an assessment. The TMO must also "win" a ballot of residents in the area concerned. This must secure a majority of residents overall and a majority of secure tenants. Such a ballot must be held every 5 years during the life of the TMO. The management agreement details the services which are to be managed by the TMO on behalf of the landlord. The extent of the devolution in service can vary enormously, particularly between small and large TMOs, but may typically include day-to-day repairs, allocations and lettings, tenancy management, cleaning and care taking and rent collection/recovery. Independent research is limited as to the effectiveness of tenant management but studies by The Office of The Deputy Prime Minister (ODPM) published in 2002 (Tenants Managing - An Evaluation of Tenant Management Organisations in England and by Rachael Newton & Professor Rebecca Tunstall for Urban Forum (Lessons For Localism:Tenant Self-Management) in 2012, support the case for devolving control of management functions to residents at a local level. An Evaluation of English Social Housing Policy 1975-2000 states
"All the studies of tenant management in local authority stock have found that they offered a quality housing service, spent less than local authorities on management and maintenance, but obtained significantly higher levels of tenant satisfaction." == Setting up a TMO ==