Right to Manage: How Leaseholders Can Take Control

If you own a leasehold flat and your freeholder or managing agent is doing a poor job — failing to maintain the building, overcharging for services, being unresponsive to requests — you may assume you need to prove negligence or mismanagement before you can do anything about it. You don't. The Right to Manage (RTM) gives leaseholders a statutory right to take control of the management of their building without having to demonstrate fault on the freeholder's part.

What RTM Is and Why It Matters

RTM was introduced by the Commonhold and Leasehold Reform Act 2002 and allows qualifying leaseholders to collectively take over the management functions of their building — appointing their own managing agents, setting service charge budgets, and overseeing maintenance contracts — without purchasing the freehold and without having to prove that the current management is inadequate.

The no-fault nature of RTM is significant. Before 2002, leaseholders could only challenge management through the Leasehold Valuation Tribunal (now the First-tier Tribunal, Property Chamber) on specific grounds of poor practice. RTM shifts the power relationship fundamentally: the leaseholders become the managers; the freeholder retains ownership of the freehold but loses day-to-day management control.

For broader context on the leasehold system and the distinction between freehold and leasehold ownership, see our freehold vs leasehold UK guide. For the earlier overview of the RTM process for blocks of flats, see our right to manage block of flats guide.

Qualifying Conditions

Not every leasehold building qualifies. Under the 2002 Act, you need to meet all of the following:

• The building must be at least 75% residential — no more than 25% of the floor area may be non-residential (commercial, retail)
• At least two-thirds of the flats must be held on long leases (originally granted for more than 21 years)
• At least 50% of the qualifying leaseholders must participate in the RTM company
• The building must not be a converted house where the freeholder lives as their only or principal home (this exemption protects resident freeholders in small conversions)

The building does not need to be purpose-built. A Victorian terrace converted into four flats will qualify as long as the percentages are met and the freeholder doesn't live there. There is no minimum or maximum number of flats, though RTM becomes more practical in buildings with at least four or five units.

The Step-by-Step RTM Process

Step 1: Form an RTM Company

An RTM company must be a private company limited by guarantee, incorporated specifically for this purpose. Its articles of association must comply with the form prescribed in the RTM Companies (Model Articles) (England) Regulations 2009. You'll need a solicitor familiar with leasehold law to handle this — company formation costs around £100–£200, but legal drafting fees will be higher.

Step 2: Issue Notice Inviting Participation (NIP)

Before serving the formal claim notice, you must invite all qualifying leaseholders in the building to join the RTM company. The NIP must be given at least 14 days before the claim notice. Any leaseholder who doesn't join at this stage can join later, but cannot vote until they've paid their membership contribution.

Step 3: Serve the Claim Notice

Once you have sufficient participation (50% of qualifying leaseholders), the RTM company serves a claim notice on the freeholder. The claim notice must specify:

• The address of the building
• The names of all leaseholders who are members of the RTM company
• The proposed acquisition date (not less than 3 months after the claim notice)

Step 4: Counter-Notice

The freeholder has 1 month to respond. They can:

• Admit the claim (confirming the RTM company's right to manage)
• Dispute the claim — but only on grounds that the qualifying conditions aren't met (e.g., fewer than 50% of leaseholders are participating, or the building doesn't qualify)

A freeholder who simply objects to losing management control cannot validly dispute the claim — they must identify a specific failure to meet the qualifying conditions.

Step 5: Tribunal If Disputed

If the freeholder serves a counter-notice disputing the claim, the RTM company can apply to the First-tier Tribunal (Property Chamber) for a determination. Tribunal fees are modest (currently £200–£800 depending on complexity) but legal costs can escalate if the freeholder contests robustly.

Step 6: Acquisition Date

If the claim is admitted (or the Tribunal rules in the RTM company's favour), management transfers on the acquisition date. From that date, the RTM company takes over all management functions previously held by the freeholder.

The RTM Company's Responsibilities

Taking over management is not the same as buying the freehold — the freeholder still owns the building. The RTM company's responsibilities include:

• Service charge management: collecting contributions, maintaining a sinking fund, preparing accounts
• Building insurance: arranging and maintaining adequate buildings insurance (the freeholder has a right to nominate an insurer, but the RTM company can challenge excessive premiums through the Tribunal)
• Repairs and maintenance: letting and managing contracts for communal areas, structure, roof, and external fabric
• Compliance: health and safety inspections, fire risk assessments (Regulatory Reform (Fire Safety) Order 2005), asbestos management, and — in buildings over 18 metres — compliance with the Building Safety Act 2022

Poor management by an RTM company can be challenged by leaseholders through the First-tier Tribunal, just as poor management by a freeholder-appointed agent could be. For detail on service charge disputes and the Section 20 consultation process, see our ground rent and service charges UK guide.

Managing Agent Selection After RTM

Most RTM companies appoint a professional managing agent rather than self-managing. Look for:

• ARLA Propertymark or RICS block management accreditation
• Membership of a recognised redress scheme
• Client money protection (CMP) — mandatory under the Client Money Protection Schemes for Property Agents (Approval and Designation of Schemes) Regulations 2018
• Transparent fee structures (percentage of service charge vs fixed fee)

Get at least three quotes before appointing, and build break clauses into the management contract.

Costs

The freeholder is entitled to their reasonable costs in connection with the RTM process (mainly legal fees for reviewing the claim notice), and the RTM company must pay these — typically £500–£2,000. These costs are usually divided among the participating leaseholders.

Interaction with Ground Rent and Lease Extension

RTM does not change the terms of your lease. If your lease contains an escalating ground rent clause or is approaching the 80-year marriage value threshold, RTM alone won't fix those problems. You will still need to extend your lease (under the Leasehold Reform, Housing and Urban Development Act 1993) or collectively enfranchise to resolve those issues.

For a full guide to the ground rent reform legislation and what it means for existing leaseholders, see our ground rent reform UK guide. For the statutory lease extension process in detail, see our how to extend a lease UK guide.

That said, managing agents appointed by an RTM company are generally more co-operative when leaseholders want to extend leases, since they're not answerable to an adversarial freeholder.

Collective Enfranchisement as a Stronger Alternative

Where at least half of qualifying leaseholders participate and the building meets the same qualifying conditions, collective enfranchisement (buying the freehold outright under the 1993 Act) is a more comprehensive option. It resolves ground rent, gives leaseholders full control over lease extensions, and eliminates any future management disputes. The cost is higher (typically £5,000–£50,000+ depending on the building's value and the complexity of the premium calculation), but for buildings where the freeholder relationship has broken down, it's often the most decisive solution.

When RTM Isn't Enough

RTM won't help you if:

• Your lease contains onerous covenants (restricting subletting, requiring consent to alter, imposing excessive charges for permissions) — these survive RTM
• You have a high or escalating ground rent — only lease extension eliminates this
• The building has significant structural or safety defects — RTM transfers management but not the freeholder's liability for pre-existing defects in their capacity as landlord
• You want to extend leases significantly below market cost — that requires enfranchisement, not just RTM

Think of RTM as the first step in reclaiming control, not the last.

Related Guides

• Right to Manage Block of Flats UK — earlier overview of the RTM process with eligibility checklist
• Ground Rent and Service Charges UK Guide — service charge disputes, Section 20 procedures, and the First-tier Tribunal
• Ground Rent Reform UK — the 2022 Act's limited scope and what existing leaseholders with escalating ground rent can do
• How to Extend a Lease UK Guide — Section 42 statutory process, premium calculation, and the 80-year cliff
• Freehold vs Leasehold UK — the fundamental differences and why leasehold brings additional obligations
• Buying a Leasehold Flat UK Checklist — 16 checks including RTM history, service charge accounts, and sinking fund status
• Sinking Fund Leasehold Property UK — how sinking funds are managed once an RTM company takes over
• Service Charges in Leasehold Flats: What's Reasonable and How to Challenge — the full legal framework for service charge disputes, Section 20 consultation, and applying to the First-tier Tribunal
• Ground Rent Reform: The Leasehold and Freehold Reform Act 2024 Explained — how the 2024 Act will make RTM easier (by removing the requirement to pay freeholder's costs) once its RTM provisions are commenced
• Leasehold Enfranchisement: How to Buy the Freehold of Your Flat — when the building qualifies and 50%+ of leaseholders want to participate, collective enfranchisement goes further than RTM by giving you ownership of the freehold itself