Right to Manage: Taking Control of Your Block Without Buying the Freehold

RTM is the answer when leaseholders want control over how their block is managed but do not want to (or cannot afford to) buy the freehold. Common triggers: high or opaque service charges; slow or poor maintenance; complaints about the managing agent; disputes over major works (Section 20 consultations); failure to comply with statutory duties (fire safety, EICR, gas safety, accounts).

RTM is not the right tool for every problem. If the issue is the lease terms themselves (ground rent doubling, restrictive covenants), RTM cannot change those — you would need lease extension or collective enfranchisement. If the issue is a one-off dispute over a single service charge, the First-tier Tribunal under section 27A LTA 1985 may be quicker than setting up an RTM.

For RTM to apply, the building must:

• Contain at least 2 flats (typical RTMs are 4-50 flats; very small blocks are sometimes uneconomic).
• Have at least two-thirds of the flats held on "long leases" — originally granted for more than 21 years.
• Have no more than 25% non-residential floor space. The Leasehold and Freehold Reform Act 2024 raises this to 50% once commenced, opening RTM to many mixed-use buildings currently excluded.
• Not have a "resident landlord" — a freeholder who lives in one of the flats and the building is not purpose-built (this excludes converted houses where the freeholder lives downstairs).

At least half of the qualifying tenants (flats with long leases) must be members of the RTM company before it can serve the formal Notice of Claim. Tenants of shorter leases, council tenants, and resident-landlord flats do not count.

The process under the Commonhold and Leasehold Reform Act 2002:

1. Form an RTM company — a private company limited by guarantee, registered at Companies House. Use the prescribed memorandum and articles (free template from LEASE). Cost: £12 Companies House fee plus solicitor fees.
2. Recruit members — invite every qualifying tenant to join the company. Membership is free. At least half of qualifying tenants must join.
3. Serve Notice of Invitation to Participate on any qualifying tenant not yet a member, at least 14 days before claiming.
4. Serve the Claim Notice on the landlord (freeholder) using prescribed form, identifying the building and the RTM company.
5. Landlord's counter-notice within 1 month — accepting the right (usual) or disputing it (rare).
6. First-tier Tribunal (Property Chamber) if disputed — the Tribunal decides whether the right applies.
7. Acquisition date — 3 months after the date the counter-notice expires (or after the Tribunal's decision). The RTM company takes over management on this date.

Total timeline: 3-6 months from claim to acquisition. Cost: £12 company formation + £600-£2,000 legal fees + tribunal fees if disputed.

From the acquisition date, the RTM company is the manager of the block. The freeholder remains the freeholder — they still own the building — but they no longer collect service charges or arrange maintenance. The RTM company:

• Collects service charges and ground rent (ground rent is forwarded to the freeholder).
• Arranges all repairs, maintenance, cleaning, gardening, and insurance.
• Complies with all landlord duties: Section 20 consultation for major works (over £250 per flat), annual statement of account, Right to Information (section 21 LTA 1985), Section 22 inspection of records.
• Complies with safety law: fire risk assessment (Regulatory Reform (Fire Safety) Order 2005), EICR (every 5 years), gas safety (where applicable), legionella risk assessment.
• Deals with disputes between leaseholders — antisocial behaviour, alterations, lease enforcement.
• Enforces the lease — including forfeiture in serious cases (rare; usually the freeholder retains forfeiture rights).

The RTM company can hire a professional managing agent to handle the day-to-day work. Many do — running a block is significant work. The RTM company directors (leaseholders) provide oversight rather than doing the operational work themselves.

RTM is not all upside. Five things to consider before claiming:

• Personal liability of directors — limited by the company structure, but directors can be liable for breaches of statutory duty. Take out directors' and officers' insurance from a reputable broker.
• Workload — running a block is significant. Plan for at least one director who can spend several hours a week on the company. Hire a professional managing agent if no director has the time.
• Apathetic members — once the excitement of taking over fades, getting AGMs quorate can be hard. Build in proxy voting.
• Reserve fund gap — if the freeholder ran down the reserve fund before handover, the RTM inherits a poor financial state. Audit before claiming.
• Major works in the pipeline — the RTM inherits any Section 20 consultations in progress. Consider timing claims to avoid taking over mid-consultation.