The Ultimate Guide to Right to Manage (RTM)

If you are reading this, you are probably fed up. Fed up with opaque service charges, slow repairs, and a managing agent who seems to answer to the freeholder rather than the people actually living in and paying for the building. You are not alone — and the good news is that the law gives you a powerful, structured way out. It is called the Right to Manage, and following reforms that came into force in 2025 it has never been easier or cheaper to use.

RTM is a no-fault legal right available to leaseholders in England and Wales. It lets you take over the management of your block — without buying the freehold, without proving the current managing agent has done anything wrong, and without needing the freeholder's permission. You simply meet the qualifying tests, follow the statutory process, and on a fixed "Acquisition Date" management transfers to a company controlled entirely by you and your fellow leaseholders.

The Leasehold and Freehold Reform Act 2024 (Commencement No. 3) Regulations 2025 (SI 2025/131) came into force on 3 March 2025, significantly expanding who qualifies and removing one of the biggest financial risks leaseholders previously faced. If your immediate problem is a specific invoice or charge demand rather than the management structure as a whole, our guide to challenging unreasonable service charges may be the faster first step — RTM and a tribunal challenge are not mutually exclusive.

What RTM Does (And Doesn’t) Do

RTM is about management control, not ownership. Understanding the distinction saves a lot of confusion and prevents expensive surprises.

Once your RTM company acquires the right, it takes over:

• Repairs and maintenance of the structure, common parts, and shared systems — roof, external walls, lifts, hallways, car parks.
• Services such as cleaning, gardening, communal lighting, security, and concierge where provided under the leases.
• Buildings insurance — choosing the insurer, negotiating premiums and cover levels.
• Service charge budgeting, collection and accounting — deciding how money is raised and spent, accountable to leaseholders.

However, RTM does not:

• Transfer ownership of the freehold. The freeholder still owns the building structure and land.
• Cancel or modify your lease obligations. You still pay service charges, ground rent (where applicable), and must comply with all existing lease terms.
• Give you freedom to rewrite lease rules from scratch. Management must still operate within the existing lease framework.
• Give you control over wider estate infrastructure. In complex developments with multiple blocks sharing a podium, car park, or estate roads, RTM applies on a block-by-block basis only — a point confirmed by the Court of Appeal in 2026 (The Courtyard RTM Co v Rockwell), where RTM companies failed the “self-contained” test because their blocks shared a podium with the wider development.

Does Your Block Qualify? (The Rules Since March 2025)

Three core tests determine whether your building can use RTM. All three must be satisfied.

1. A self-contained building with at least two flats

RTM applies to buildings — or self-contained parts of buildings — containing flats. Where RTM is claimed over a part of a building, that part must be a vertical division of the structure, capable of being redeveloped independently, with services that are or could be provided independently. Horizontal splits or sections sharing a structural podium or integrated services typically will not qualify.

Some buildings are excluded regardless — for example, a converted house containing four or fewer flats where the freeholder or an adult family member has lived in one flat as their principal residence for at least the past 12 months (the “resident landlord” exclusion).

2. At least two-thirds of flats must be held by long leaseholders

At least two-thirds of all flats must be let to qualifying tenants — people holding a long lease, meaning the original lease term was more than 21 years when first granted. Importantly, the current unexpired term is irrelevant — a lease with only 15 years remaining still qualifies if originally granted for 99 years. There is also no residency requirement: buy-to-let investors hold exactly the same RTM rights as owner-occupiers.

3. The 2025 update: commercial space can now be up to 50% of the building

Under the old rules, if more than 25% of a building’s internal floor area was non-residential, the building was excluded entirely. Many developers deliberately structured buildings with just over 25% commercial space specifically to block RTM. From 3 March 2025, the limit is 50% of internal floor area. This brings a large number of city-centre mixed-use blocks into scope for the first time.

Small Block vs. Large Block: Completely Different Challenges

RTM vs. Buying the Freehold: Which Is Right for You?

RTM is fast, relatively cheap, and available as a no-fault right. You can have management transferred within a few months. The downside: you do not gain new ownership rights, and the freeholder can reclaim management functions in certain circumstances if the RTM company fails to perform.

Buying the freehold collectively gives total long-term control — you can extend leases to 990 years for a nominal ground rent and remove the freeholder entirely. But it requires raising significant capital to buy out the freeholder at market value, often tens of thousands of pounds per flat, plus substantial professional fees. It is a more complex, longer process.

Many leaseholder groups pursue RTM first to stop the bleeding — taking control quickly and cheaply — and then consider enfranchisement later once the block’s finances and relationships are in better order. They are not mutually exclusive.

How the RTM Process Actually Works

The statute sets out a precise sequence of steps. Follow it carefully — errors in notices are one of the most common ways a freeholder can successfully challenge a claim.

Step 1: Form the RTM company

RTM can only be exercised through a specific legal vehicle: a private company limited by guarantee with RTM-prescribed articles of association. The Companies House online incorporation fee is £100 (increased from £50 on 1 February 2026). The company’s name must end with “RTM Company Limited” and it must use the prescribed model articles updated in March 2025 — using outdated pre-2025 articles is a procedural error that could invalidate the claim. The updated model articles also cap landlord votes to one-third of qualifying tenant votes, preventing a freeholder from dominating the company in mixed-use buildings.

Step 2: Serve Notices Inviting Participation and recruit to 50%

Once the RTM company exists, you must serve a Notice Inviting Participation (NIP) on every qualifying leaseholder who has not yet joined. A mandatory 14-day waiting period must be observed after serving NIPs before you can proceed. You cannot serve the Claim Notice until at least 50% of qualifying flats are members.

Step 3: Serve the Claim Notice

When you have at least 50% membership and the building clearly qualifies, your solicitor serves a formal RTM Claim Notice on the landlord and any other relevant parties. This notice must identify the building, list qualifying tenants and company members, confirm the building qualifies, and specify a proposed “Acquisition Date” — typically at least four months in the future. Copies must be given to every qualifying tenant not yet a member.

Step 4: The Counter-Notice period

The freeholder has one month to serve a Counter-Notice either admitting the claim or disputing it. They can only dispute on specific statutory grounds — for example, that the building does not qualify, or the RTM company does not have sufficient membership. They cannot refuse simply because they dislike the idea or want to retain management. If they dispute without valid grounds and the matter goes to tribunal, they risk a costs order against them.

Step 5: The Acquisition Date

If the freeholder admits the claim — or the tribunal confirms your entitlement — the Acquisition Date arrives. The RTM company formally takes over all management functions. The freeholder and existing managing agent must hand over service-charge balances, contracts, compliance certificates, and all other records needed to manage the building.

How Much Does RTM Cost?

RTM is significantly cheaper than buying the freehold, and from March 2025 a major cost risk has been removed entirely.

Your own professional fees

Companies House incorporation: £100 online. Always use a solicitor or specialist to ensure the correct 2025 model articles are filed.

RTM solicitor fees: typically £2,000–£5,000 in total for a straightforward, uncontested claim — often around £200 per participating flat. If the freeholder contests at the First-tier Tribunal, budget for an additional £3,000–£5,000. Some RTM specialists offer fixed-fee packages — always read the terms, particularly for arrangements where costs are recovered through future management fees.

Disbursements: Land Registry office copies, postage (use recorded delivery for all statutory notices), and any surveyor’s floor-space assessment.

The crucial 2025 update: you no longer pay the freeholder’s legal costs

Under the old regime, leaseholders were liable for the freeholder’s “reasonable” legal and management costs of dealing with the RTM claim — costs that could run to thousands of pounds and be passed back through the service charge. From 3 March 2025, the Leasehold and Freehold Reform Act 2024 removes this risk. Leaseholders are no longer required to cover the freeholder’s non-litigation legal costs for an RTM claim, and those costs can no longer be recovered through the service charge. Cost orders against leaseholders are now the exception, not the default.

The Hardest Part: Getting Your Neighbours on Board

The legal process is predictable. The human side is where RTM lives or dies. Getting 50% of qualifying flats to actively join the RTM company requires the same energy as a small political campaign. You will encounter apathy (“my flat is just an investment”), fear (“what if the costs spiral?”), and genuine confusion (“is this the same as buying the freehold?”). All manageable if you are organised and communicate clearly.

Form a steering committee first

Start with a small group of motivated leaseholders — three to five people from different parts of the block who are prepared to coordinate, chase, and share tasks. Without it, momentum collapses when initial enthusiasm fades.

Communicate in plain English

Prepare a simple one-page explainer: what RTM is, why your block qualifies, what will change (and what will not), and a rough cost and timetable. Lead with the fact that RTM is a no-fault right and that leaseholders no longer face liability for the freeholder’s non-litigation legal costs. Address fears directly — particularly whether leaseholders will be expected to run the building themselves (most RTM companies appoint a professional agent; directors provide oversight, not labour).

Use every channel available

Set up a WhatsApp group with a QR code on letter drops. Post in communal areas where leases allow. Send letters to every flat including buy-to-let investors (often reachable through their managing agents). Some residents will only be persuaded by a direct conversation at the door. Show them your plan for appointing a professional, accredited managing agent — a credible “what happens next” plan converts fence-sitters into supporters.

You Won the RTM. Now What?

Winning RTM is a real achievement. It is also the moment when your legal responsibilities begin in earnest. On the Acquisition Date, your RTM company becomes legally responsible for all management obligations under the leases. The previous managing agent must hand over service-charge balances, contracts, compliance certificates, and all other records needed to manage the building.

Your directors are now corporate officers — with personal liability

Directors of the RTM company become corporate officers bound by the Companies Act 2006, with fiduciary duties and personal liability for the building’s legal compliance — including health and safety, fire risk assessments, asbestos management, and (for higher-risk buildings) the duties imposed by the Building Safety Act 2022. Failing to file annual accounts with Companies House can result in the company being struck off and directors facing personal fines. For these reasons, procuring Directors & Officers (D&O) liability insurance is a practical necessity — it ring-fences the personal assets of volunteer directors against claims for alleged wrongful acts.

Section 20 consultation: the rule that can bankrupt an RTM company

Before carrying out any works costing any single leaseholder more than £250 — or entering into a long-term contract costing any leaseholder more than £100 per year — the RTM company must follow a rigid three-stage statutory consultation process:

1. Notice of Intention — describe the proposed works and invite leaseholders to nominate contractors (30-day consultation).
2. Notice of Estimates — obtain at least two competitive estimates, share them, allow 30 days for observations.
3. Notice of Reasons — if you do not choose the lowest estimate, explain why in writing before awarding the contract.

If the RTM company gets this wrong, the law caps the amount it can recover from leaseholders at just £250 per flat regardless of actual cost. On a £60,000 roof repair across a 15-flat block, a failed Section 20 consultation could leave the RTM company unable to recover £56,250 of legitimate expenditure. This is one of the most financially devastating mistakes made by self-managing RTM companies.

Appoint a professional managing agent

For all but the smallest blocks, the volume of compliance demands — Section 20 consultation, health and safety, data protection, company filings, service charge accounting, insurance — requires professional intervention. The vast majority of successful RTM companies appoint a professional, RTM-experienced block managing agent to handle day-to-day operations, with RTM directors providing oversight. Our guide to choosing a block manager covers the full vetting checklist: accreditations to verify, fee structures to dissect, the workload ratio question to ask every agency director, and the six questions that reveal whether an agent is genuinely worth appointing.

Frequently Asked Questions

This guide is general information about leasehold in England & Wales, not legal advice. Rules differ in Scotland and Northern Ireland, and leasehold law is changing — check your lease and current guidance, or take professional advice, before acting.

Last updated July 2026.