Right to Manage Explained: How Leaseholders Take Control of Their Building

What Right to Manage is

Right to Manage (RTM) is a statutory right introduced by the Commonhold and Leasehold Reform Act 2002 that allows leaseholders of a block of flats to take over the management of their building from the freeholder, without buying the freehold and without proving fault. RTM does not change ownership: the freeholder remains the freeholder, but the day-to-day management responsibilities (service charge collection, repairs, contractor selection, insurance) transfer to a leaseholder-controlled company called the RTM company.

It is the most accessible way for leaseholders to take collective control over how their building is run.

Why leaseholders use RTM

The most common reason is dissatisfaction with the existing managing agent: poor communication, unjustified charges, slow repairs, expensive contractors, or insurance commissions that benefit the freeholder rather than the leaseholders. With RTM, the leaseholders choose their own managing agent (or self-manage), set their own contractor list, and approve their own budget. The financial savings often more than cover the cost of setting up the RTM company.

Qualifying criteria

Not every block qualifies. The main rules are:

1. The building must be a self-contained block of flats (or part of a building).

2. At least two-thirds of the flats must be held by qualifying leaseholders (broadly, leases originally granted for more than 21 years).

3. No more than 25% of the floorspace can be non-residential. The Leasehold and Freehold Reform Act 2024 raises this to 50%, bringing many mixed-use buildings into scope.

4. At least half of the qualifying leaseholders must agree to participate by becoming members of the RTM company.

There are some exclusions, notably for buildings where the freeholder lives in one of the flats in a block of fewer than 4 flats.

The process

1. Form an RTM company. This is a private company limited by guarantee, with a standard prescribed memorandum and articles. Companies House registration costs around £50.

2. Recruit members. At least half of qualifying leaseholders must join.

3. Serve a Claim Notice on the freeholder. The notice must include the names of the participating members and the proposed acquisition date (at least 4 months in the future).

4. Counter Notice. The freeholder has 1 month to admit the right or dispute it on technical grounds.

5. Acquisition date. On the date specified in the notice, management transfers to the RTM company.

The whole process from forming the company to acquisition typically takes 6 to 9 months.

Cost

The set-up cost is modest: company formation (around £50), legal advice on the notice and qualifying criteria (typically £1,000 to £3,000), and any printing or service of notices. The freeholder is entitled to recover their reasonable costs of dealing with the claim, although the 2024 Act caps these.

Once RTM is in place, the leaseholders pay management costs as before, but they choose the managing agent and the budget. Most blocks see service charges reduce by 10% to 30% after RTM, mainly through removing freeholder commissions and renegotiating contractor rates.

What changes after acquisition

After the acquisition date, the RTM company:

• Collects the service charge
• Maintains the structure and common parts
• Insures the building
• Enforces lease covenants on behalf of leaseholders
• Approves alterations

The freeholder retains ownership, ground rent (where still applicable), and the right to enforce certain covenants directly. They can also resume management if the RTM company is wound up or the right is otherwise lost.

Confirm your building qualifies

Before you spend money on legal advice, confirm the basic facts: how many flats are in the building, how many are leasehold, what proportion of floorspace is non-residential. You can verify the tenure of every flat in your building using Property Passport UK at [/search](/search), which sources tenure from HM Land Registry. Once you have a list of leaseholders, the qualifying criteria are usually obvious.

Look up any leasehold property on Property Passport UK

Property Passport UK shows tenure (freehold or leasehold) sourced directly from HM Land Registry for every one of the 19.35 million properties in England and Wales. For leasehold properties, you can also see lease length, ground rent, and service charge information where it has been published. Search by postcode or address at [propertypassport.uk/search](/search), or look up an EPC at [/epc](/epc).

Related guides

• What is a leasehold property
• How to extend a lease
• Leasehold Reform Act 2024 explained
• Service charge disputes