Right to Manage (RTM): How Leaseholders Can Take Control of Their Building
The Right to Manage allows qualifying leaseholders to take control of their building’s management without proving fault by the landlord or managing agent. It can give leaseholders more influence over repairs, insurance, service charges and contractors.
This guide explains who can use the Right to Manage, how the RTM process works, and what responsibilities leaseholders take on once management transfers.
Why Leaseholders Use the Right to Manage
For many leaseholders, concerns about the management of their building can become a persistent source of frustration. Service charges may continue to increase without sufficient explanation, repairs may be delayed, communication may be poor, and important decisions affecting residents can appear to be made without meaningful consultation.
In these circumstances, leaseholders often ask whether they have any real control over how their building is managed. One option that is frequently overlooked is the Right to Manage (RTM), a statutory right that allows qualifying leaseholders to take over the management of their building without having to prove fault on the part of the landlord, freeholder or managing agent.
The Right to Manage was introduced by the Commonhold and Leasehold Reform Act 2002, primarily in Part 2, Chapter 1, which applies in England and Wales. This legislation, together with the supporting regulations and later amendments made by the Leasehold and Freehold Reform Act 2024 (LAFRA), sets out a detailed statutory route for qualifying leaseholders to take over management responsibilities for their building through a dedicated RTM company, provided the specific legal requirements are satisfied.
The legal process is strictly procedural, and disputes can arise regarding eligibility. Leaseholders who successfully acquire the management rights must then assume significant ongoing responsibilities. Before commencing an RTM claim, it is therefore important to understand both the legal framework and the practical implications of taking control of a building.
What Is the Right to Manage and Why Does It Matter?
Importantly, RTM does not transfer ownership of the freehold or the building. The freeholder remains the legal owner, and leaseholders continue to hold their existing leases. What changes is who is responsible for the day-to-day management of the building and the exercise of key management functions.
Once the right to manage takes effect, responsibility for many key management functions transfers from the landlord or its managing agent to the RTM company. This typically includes maintenance and repairs, the management of building insurance (subject to the statutory rules), service charge administration, and the procurement of contractors. Leaseholders therefore gain a direct say in how their building is run and how funds are spent.
A key feature of RTM is that leaseholders do not need to prove fault. There is no requirement to demonstrate poor management, unreasonable service charges or misconduct by the landlord. The right exists provided the statutory criteria are satisfied, regardless of the quality of the current management.
RTM should be distinguished from collective enfranchisement, under which qualifying leaseholders acquire the freehold rather than management control. In many cases, RTM can be a more straightforward and cost-effective route than collective enfranchisement because it focuses solely on management rights rather than ownership. Since 3 March 2025, changes to the law also mean that leaseholders, acting through an RTM company, are no longer usually required to pay the landlord’s RTM claim costs, except in limited circumstances set out in the legislation. However, the most suitable option will always depend on the particular building, the lease terms and the objectives of the leaseholders.
Can Your Building Qualify for the Right to Manage?
Not all buildings are eligible for RTM, and the qualification criteria are often more technical than leaseholders initially expect. Whether a building qualifies will depend on both its physical structure and the nature of the leasehold ownership within it.
It helps to keep in mind that two separate thresholds are at work: an eligibility test about the building and its leases, and a separate participation test about how many leaseholders join the RTM company. They do different jobs, and confusing the two is a common cause of invalid claims.
Broadly speaking, a building may qualify if it is self-contained, contains at least two flats, and at least two-thirds of the flats are held by qualifying tenants. In addition, following the amendments introduced by LAFRA, the non-residential parts of the building (for example shops or offices) must not exceed 50% of the internal floor area (usually excluding common parts), which can be a key issue in mixed-use blocks. A qualifying tenant is usually a leaseholder holding a long lease originally granted for more than 21 years.
In addition, at the point the claim is made, the RTM company must have as members qualifying tenants of at least 50% of the flats in the building. This participation requirement is separate from the overall eligibility test and, in practice, means that a significant proportion of leaseholders need to sign up before the formal process can begin. Meeting this threshold often calls for coordination between leaseholders and a clear understanding of who is eligible to participate.
Mixed-use buildings can present additional challenges. Where commercial premises account for more than 50% of the internal floor area, the building will not usually qualify for RTM, and disputes often arise where landlords and leaseholders take different views on how that floor space should be measured or classified. The increase in the non-residential limit under LAFRA means that more mixed-use buildings can now qualify than was previously the case, but careful assessment is still required.
Qualification issues are one of the most common reasons RTM claims become contentious. While the legislation is designed to be accessible, it is also highly technical, and small errors in assessment at an early stage can have significant consequences later in the process.
How Do Leaseholders Exercise the Right to Manage?
The process of exercising the Right to Manage is strictly procedural and must be followed carefully to avoid disputes or invalid notices.
The process begins with the formation of an RTM company. The RTM company becomes the legal vehicle through which the right to manage is exercised. It must be set up in accordance with statutory requirements and have appropriate constitutional documents in place.
Once established, the RTM company must serve a statutory “notice inviting participation” on qualifying leaseholders who are not already members. This formal step ensures that all eligible tenants have the opportunity to participate in the claim and helps demonstrate the required level of support.
The next stage is the service of a formal claim notice on the landlord and any relevant parties. The notice must contain prescribed information and comply with statutory form and content requirements. Accuracy at this stage is critical, as defects in the notice can lead to challenges or delays.
In some circumstances, errors may result in delays, challenges from the landlord, or the need to serve a fresh claim notice. Following receipt of the claim notice, the landlord may serve a counter-notice admitting or disputing the claim.
Where entitlement is disputed, either party may refer the matter to the First-tier Tribunal (Property Chamber), which deals with most residential leasehold and Right to Manage disputes in England and will determine whether the statutory requirements have been satisfied in the particular case. In Wales, the equivalent jurisdiction is exercised by the Leasehold Valuation Tribunal (Residential Property Tribunal Wales). Following reforms under LAFRA, the tribunal also has an expanded role in resolving certain disputes about compliance with RTM obligations and related costs, rather than these matters being handled in the County Court.
If the claim is successful, the right to manage takes effect on the acquisition date. At that point, the RTM company assumes responsibility for the management functions previously exercised by the landlord or managing agent.
The landlord may be required to provide information and documentation relating to the building’s management. This may include insurance policies and claims information, service charge records, maintenance contracts and other documents necessary for the continued management of the property.
What Responsibilities Does an RTM Company Take On?
Taking over management of a building brings significant responsibilities, and these are often underestimated at the outset of an RTM claim.
The RTM company must ensure that service charges are demanded, accounted for and applied appropriately, in line with both the leases and the statutory requirements on reasonableness and consultation under the Landlord and Tenant Act 1985. This requires accurate budgeting, proper record-keeping and clear communication with leaseholders. Financial transparency becomes a central responsibility of the company and its directors, and failures in this area can quickly lead to disputes.
In addition, the RTM company becomes responsible for maintenance, repairs and general upkeep of the building. Decisions must be made about which contractors to appoint, how works should be prioritised, and how quality is monitored. These decisions can have long-term consequences for both cost and building condition.
Depending on the nature of the building and the responsibilities taken on, the RTM company will also need to comply with various health and safety obligations, including fire risk assessment and ongoing fire safety duties under the fire safety legislation, and, for some higher-risk buildings, additional requirements under the developing building safety regime. These obligations require active oversight and appropriate systems, and the legal framework in this area continues to evolve, so it is important to check the current position before making decisions.
In many cases, RTM companies choose to appoint professional managing agents to assist with day-to-day operations. The purpose of RTM is not necessarily to eliminate professional management. Rather, it is to ensure that leaseholders control who provides those services and how decisions are made.
What Are the Most Common Risks and Pitfalls?
While RTM can be an effective way for leaseholders to take control of their building, there are several common pitfalls that can create difficulties if not properly managed.
Procedural errors are one of the most frequent issues. Because the process is strictly regulated, even relatively small mistakes (for example, naming the wrong landlord entity in a notice, missing a required party, or mis-calculating a deadline) can lead to disputes, invalidate a key step and increase costs for the leaseholders.
Internal disagreements between leaseholders can also arise once control is obtained. Although leaseholders may agree on dissatisfaction with existing management, they may have differing views on budgeting, contractors, and long-term planning once they assume responsibility.
There is also a risk that the ongoing responsibilities of managing a building are underestimated. RTM is not simply a one-off legal process: it requires continuing participation, day-to-day decision-making and effective governance from the RTM company and its directors, often with professional support from managing agents or advisers.
Many disputes can be avoided through early consideration of qualification requirements, procedural obligations and management responsibilities. Taking advice at an early stage can reduce the risk of errors, help structure the process efficiently and, in many cases, keep overall costs and disruption lower than trying to unpick problems once a claim has run into difficulties. That is particularly important now that, under the reformed cost rules introduced by LAFRA, RTM companies are generally no longer liable for landlords’ RTM claim costs, but may still face adverse cost orders in certain circumstances if disputes escalate.
How We Can Help
At The Jonathan Lea Network, we advise leaseholders, RTM companies and residential property owners on Right to Manage claims and leasehold property matters. Our work in this area typically includes:
- RTM claims: Advising on RTM eligibility, statutory procedures, claim notices and disputes relating to the acquisition of management rights.
- Leasehold and management matters: Assisting with leasehold disputes, RTM company governance and property management matters.
We act for leaseholders, RTM directors and residential property owners across Sussex, London and the wider UK, and routinely work with surveyors, managing agents and other property professionals. Early advice can help confirm eligibility, avoid procedural errors and put the RTM company in a stronger position to manage the building effectively.
Contact Us
We will respond to most enquiries with both an indicative scope of work and fee estimate, as well as the offer of a complimentary 20-minute discovery video call to discuss your issues and how we can help, before sending a more considered formal fee estimate via email.
In some limited cases, if you would just like initial advice and guidance on a call, we may instead offer a fixed fee appointment (commonly charged between £280 and £500 + VAT) whereby we will review the information you provide, hold a video call consultation and then follow up with an advisory email (as well as a fee estimate for any further work identified).
Please email wewillhelp@jonathanlea.net or call us on 01444 708640 as a first step. We first need an overview of the background and your issues, together with any significant documents, to provide an indicative scope of work and fee estimate.
VAT is charged at 20%.
This article is intended for general information only, applies to the law at the time of publication, is not specific to the facts of your case and is not intended to be a replacement for legal advice. It is recommended that specific professional advice is sought before relying on any of the information given. © Jonathan Lea Limited.