Right to Manage (RTM)
Right to Manage lets leaseholders take over the management of their building without buying the freehold and without having to prove the landlord has done anything wrong. It is a statutory right under the Commonhold and Leasehold Reform Act 2002. If your building qualifies and enough leaseholders take part, the freeholder cannot refuse.
Not sure whether your building already has a management company? Our guide to RTM, RMC and the alternatives sets out the four arrangements and which one applies to you.
What Right to Manage actually gives you
On the acquisition date, the RTM company takes over the landlord functions of management: setting and collecting the service charge, arranging maintenance and insurance, enforcing lease covenants, and appointing the managing agent. You choose the agent, you approve the budget, and you see where the money goes.
It does not transfer ownership. The freeholder keeps the freehold, ground rent remains payable, and the leases stay exactly as they are.
Does your building qualify?
The building must meet all of the following:
It is a self-contained building, or a structurally detached part of one
It contains at least two flats
At least two-thirds of the flats are held by qualifying tenants, meaning leases originally granted for more than 21 years
No more than 50 per cent of the internal floor area is non-residential. This limit was 25 per cent until 3 March 2025, when the Leasehold and Freehold Reform Act 2024 raised it, so a mixed-use building that failed the test before may qualify now
The landlord is not a local authority
There is one further exclusion. A building does not qualify if it is not purpose-built, has four or fewer flats, and the landlord or a family member has lived in one of them as their only or principal home for at least twelve months.
How many leaseholders do you need?
Members of the RTM company must hold at least half the flats in the building. In a two-flat building, both leaseholders must join. This is a membership test, not a vote, and it is the point most claims turn on, so it is worth establishing early who is willing to be named.
The process, step by step
1. Check eligibility. We review the leases, the floor areas and the flat count and tell you whether the building qualifies before anyone spends money.
2. Form the RTM company. A private company limited by guarantee with the prescribed articles, registered at Companies House. Participating leaseholders become members and directors are appointed.
3. Notice inviting participation. Served on every qualifying tenant who is not yet a member. The claim notice cannot be served until at least fourteen days after this.
4. Claim notice. Served on the freeholder and any other management party. It names the acquisition date, which must be at least three months after the deadline for the counter-notice.
5. Counter-notice. The freeholder has at least one month to admit or dispute the claim. Most claims that are properly prepared are admitted.
6. Acquisition and handover. Management transfers on the acquisition date. The freeholder must pay over uncommitted service charge and reserve fund balances.
What if the freeholder objects?
A counter-notice must state the specific ground on which the claim is disputed. If it does, the RTM company applies to the First-tier Tribunal to determine whether the right exists. Disputes almost always turn on the technical qualifying criteria or on a defect in the notices, which is why the preparation matters more than the argument.
What it costs
There are company formation costs, the cost of preparing and serving the notices, and any tribunal costs if the claim is contested.
The position on the freeholder’s costs changed on 3 March 2025. Under sections 87A and 87B of the 2002 Act, an RTM company and its members are no longer liable for the costs a landlord incurs as a result of a claim notice. There are exceptions: you can still be liable if the claim is withdrawn or ceases to have effect, or if the RTM company acts unreasonably. Landlords also cannot pass those costs to non-participating leaseholders through the service charge. For claims served before that date the old rules apply.
Temphis can fund the upfront cost of establishing the RTM structure and recovering management, with the cost recovered over time through the management appointment and subject to suitability. See funding for RTM claims.
What changes on the acquisition date, and what does not
Changes: who sets the budget, who holds the service charge funds, who appoints and instructs contractors, and who you contact about the building.
Does not change: your lease, your ground rent, who owns the freehold, or your obligation to pay the service charge. The RTM company inherits the landlord’s management obligations, which means it also inherits the responsibility for compliance, so directors take on real duties.
Frequently asked questions about Right to Manage
Do we need the freeholder to agree?
No. Right to Manage is a no-fault right. If the building qualifies and the notices are correct, the freeholder cannot prevent it.
Does our building qualify if there are shops on the ground floor?
Probably, if the non-residential floor area is 50 per cent or less. That threshold doubled on 3 March 2025, so buildings that were previously excluded are worth re-checking.
How long does the whole process take?
Around four to six months from first advice to the acquisition date for an uncontested claim, most of which is the statutory notice periods rather than anything either side controls.
Do RTM directors take on personal liability?
Directors take on the ordinary duties of a company director. In practice the main protections are proper insurance, accurate accounts and a competent managing agent doing the compliance work.
Can we do RTM ourselves?
Yes, and some leaseholders do. The risk is procedural: a defective notice is the most common reason a claim fails, and a failed claim usually cannot be re-served for twelve months.
What happens to the existing managing agent?
Their appointment ends on the acquisition date. The RTM company appoints whoever it chooses, which may be the same agent.
What an RTM company said about us
“We have been working with Temphis since January 2025 and have been extremely pleased with the level of service and professionalism. Temphis has worked closely with the RTM Directors to manage the service charge budget effectively and transparently.
Importantly, Temphis has also been a valuable bridge between us and the freeholder. Before they took over as our management agent, communication with the freeholder was limited and often ineffective, which caused ongoing frustration among the leaseholders. Since Temphis came on board that has improved significantly.
We would not hesitate to recommend Temphis to any RTM company.”
— RTM Directors, South London
Find out whether your building qualifies
Temphis manages around 1,000 units across 50 residential buildings and takes on ten to fifteen new properties a year, across London, the South East, the North West and North Wales. We are regulated by RICS, a member of The Property Institute and registered with The Property Ombudsman.
Send us the building details and we will check eligibility at no cost. Ask us to check your building.
