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

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 leaseholders in a qualifying building to collectively take over the management functions from their freeholder or managing agent, through a special purpose company called an RTM company. Crucially, leaseholders do not need to demonstrate any fault on the part of the existing manager — the right exists simply because they are leaseholders.

RTM does not transfer ownership of the freehold. The freeholder remains the legal owner of the building and retains rights under the leases. What transfers is the right to manage — to appoint contractors, set the service charge budget, maintain the building, and oversee the day-to-day running of the block.

Do We Qualify?

To exercise RTM, the building must meet all of the following criteria:

• **A self-contained building or part of a building** — detached or structurally independent
• **At least two flats** held on long leases
• **At least two-thirds of flats** in the building are held on long leases (21 years or more at the original grant)
• **The building must be at least 75% residential** by floor area
• **No more than 25% of the floor area is non-residential** (commercial units, for example)

Some exclusions apply — local authority landlords, for instance, are exempt. The building must not already be subject to a court-appointed manager under the Landlord and Tenant Act 1987.

Leaseholders participating in the RTM claim must collectively own at least 50% of the total number of flats in the building. Note this is 50% of all flats — not just leaseholders willing to participate.

Setting Up an RTM Company

The first step is to incorporate an RTM company at Companies House. The company must be a private company limited by guarantee, formed specifically for RTM purposes. All participating leaseholders become members. The Leasehold and Freehold Reform Act 2024 simplified aspects of this process, reducing certain procedural barriers.

The Notice Procedure

Once the RTM company is formed and membership confirmed, the company must serve a formal **Claim Notice** on the landlord (and any other relevant party, such as a head leaseholder). The landlord then has a fixed period to serve a **Counter-Notice** either accepting the claim or disputing it.

If the landlord disputes the claim, the RTM company can apply to the First-tier Tribunal (Property Chamber) for a determination. If no dispute is raised, or the Tribunal finds in the leaseholders' favour, the RTM automatically takes effect on an **Acquisition Date** specified in the claim notice — at least three months after the counter-notice date.

Practical Realities of Self-Management

RTM gives leaseholders control, but it also gives them responsibility. You will need to:

• Arrange building insurance
• Manage service charge accounts (which must comply with the Landlord and Tenant Act 1985)
• Follow Section 20 consultation for major works
• Maintain proper accounting records

Most RTM companies appoint a professional managing agent rather than attempting to manage the building entirely themselves. This preserves the benefits of professional expertise while allowing leaseholders to hold the agent to account and change them if dissatisfied — something not always possible where the freeholder selects the agent.

Modelling the Cost of Self-Management

Understanding your current service charge costs and comparing them against what competent self-management might achieve is a useful exercise before committing to RTM. Use our [leasehold cost calculator](/leasehold-cost-calculator) to map your current outgoings and identify where savings might realistically be found.