Legal & Tenure

Right to Manage, How Leaseholders Can Take Control of Their Building

The Right to Manage allows qualifying leaseholders to take over the management of their building from the freeholder without having to prove mismanagement or pay compensation.

Published: 16 Mar 2026 · Updated: 16 Mar 2026 · 7 min read

#PropertyLaw#UKConveyancing#RightToManage#Leasehold#LeaseholdReform#PropertyPassportUK

What is the Right to Manage?

The Right to Manage (RTM) is a statutory right introduced by the Commonhold and Leasehold Reform Act 2002. It allows qualifying leaseholders in a building to collectively take over management functions from the freeholder, without needing to prove the freeholder has been negligent or unreasonable, and without paying any compensation.

Management functions that transfer include appointing contractors, managing service charges, maintaining building insurance, and overseeing repairs and maintenance.

Which Buildings Qualify?

Qualifying condition	Requirement
Building type	Self-contained building or part of a building
Residential use	At least two-thirds of flats held on long leases
Leaseholder participation	At least 50% of qualifying tenants must join the RTM company
Non-residential use	No more than 25% of the floor area can be non-residential
Resident landlord exception	Does not apply where the freeholder lives in one of the flats

The RTM Company

Before serving any notices, leaseholders must incorporate a Right to Manage company, a company limited by guarantee, formed specifically for this purpose. Membership is open to all qualifying tenants. The freeholder is also entitled to become a member once the RTM is acquired.

The Claim Process

1. **Invite participation**, Notify all qualifying tenants and invite them to join. You need at least 50%.

2. **Notice of Invitation to Participate**, Once the RTM company is formed, formally invite any remaining qualifying tenants. They have 14 days to respond.

3. **Serve the Claim Notice**, The RTM company serves a formal Claim Notice on the freeholder, stating the date on which RTM will be acquired (at least three months after the notice date).

4. **Counter Notice**, The freeholder has one month to serve a Counter Notice if they dispute entitlement. If disputed, the RTM company can apply to the First-tier Tribunal.

If no Counter Notice is served, the RTM is acquired automatically on the specified date.

After Acquisition

Once RTM is acquired, the RTM company takes over management functions. Existing contracts with managing agents transfer. The freeholder retains ownership of the freehold, RTM does not change tenure. LEASE provides guidance on running an RTM company effectively. Property Passport UK can help RTM companies maintain a central record of building documentation, compliance certificates, and major works history.