Right to Manage (RTM): Process & Costs

Eligible leaseholders can take control of the management responsibilities for their building from their freeholder or landlord by setting up a Right to Manage (RTM) company.

Exercising the Right to Manage does not mean the leaseholders buy the freehold. Instead, it is a statutory "no-fault" right that allows leaseholders to take over the day-to-day management, maintenance, and insurance of the building and communal areas—without having to prove that the existing freeholder or managing agent is at fault.

The legal framework is governed by the Commonhold and Leasehold Reform Act 2002. On 3 March 2025, major reforms under the Leasehold and Freehold Reform Act 2024 came into force, making it significantly easier and cheaper for leaseholders to claim the Right to Manage.

This guide explains what an RTM company does, the March 2025 rule changes, the step-by-step Right to Manage process, timescales, and costs.

What responsibilities does the Right to Manage company take over?

A freeholder is typically responsible for carrying out repairs and maintenance to the structure and communal areas of a block, as well as arranging buildings insurance and collecting leasehold service charges.

Under the Commonhold and Leasehold Reform Act 2002, an RTM company takes over these management functions from the acquisition date, including:

• Day-to-day maintenance and repairs of the structure, roof, and lifts;
• Cleaning, lighting, and upkeep of communal hallways, stairs, and gardens;
• Negotiating and placing buildings insurance and utility contracts;
• Collecting and managing service charge budgets and reserve funds;
• Planning and consulting on Section 20 major works; and
• Granting lease approvals (such as consent for subletting, assignments, or alterations).

Note that the RTM company does not take over the collection of ground rent, the management of purely commercial units in the building, or the right to forfeit a lease.

The Right to Manage process in 4 simple steps

To take over management, you must verify your building qualifies, incorporate a dedicated RTM company, invite all qualifying flat owners to join, and serve a formal claim notice on your freeholder.

Although the Right to Manage is simpler and much cheaper than Collective Enfranchisement (buying the freehold), your building must satisfy strict statutory qualifying criteria:

• Self-contained building: The claim must relate to a self-contained building (or a self-contained part of a building capable of independent redevelopment) containing at least two flats.
• Two-thirds long leaseholders: At least two-thirds of the flats in the block must be let to "qualifying tenants"—meaning leaseholders whose original lease was granted for a term of more than 21 years (there is no minimum residency requirement, so buy-to-let owners qualify).
• At least 50% participation: Before serving the formal claim notice on the freeholder, the membership of your RTM company must include qualifying tenants from at least 50% of the total number of flats in the building (if there are only two flats in the building, both flat owners must join).
• Maximum 50% commercial space: Since 3 March 2025, no more than 50% of the building's total internal floor area (excluding common parts) can be used for non-residential or commercial purposes.
• No resident landlord exemption: For converted (non-purpose-built) properties containing four or fewer flats, the building is exempt if the freeholder or an adult member of their family has lived in one of the flats as their principal home for at least the last 12 months.
• Multi-block estates (*Triplerose* rule): Following the Court of Appeal ruling in Triplerose Ltd v Ninety Broomfield Road RTM Co Ltd, a single RTM company can only acquire the right to manage a single self-contained block. If your estate has multiple separate blocks, each block must form its own RTM company and serve a separate claim notice, though they can all appoint the same managing agent afterwards.

The Right to Manage must be exercised through a dedicated private company limited by guarantee (not shares), incorporated at Companies House using the statutory prescribed Model Articles of Association (as amended in March 2025).

You and your fellow leaseholders can incorporate the company yourselves or instruct a solicitor to do so. Once incorporated with its initial directors, the RTM company must serve a formal Section 78 Notice Inviting Participation on every qualifying leaseholder in the building who is not already a member of the company—you cannot exclude any qualifying flat owner.

The Section 78 Notice must include the prescribed statutory particulars, state where the company's Articles of Association can be inspected, and confirm whether the RTM company intends to appoint a professional managing agent or manage the block itself.

Because landlords frequently scrutinise Section 78 Notices for defective service to challenge an RTM claim, you must serve non-resident flat owners at any alternative correspondence address they have notified, and retain proof of postage and receipt for every flat.

Once at least 14 days have passed since the last Section 78 Notice Inviting Participation was served—and provided qualifying tenants from at least 50% of the flats in the building are now formally registered as members of the RTM company—you can serve the Section 79 Notice of Claim on the freeholder (as well as any intermediate landlords, third-party parties to the lease, and any court-appointed manager).

The Section 79 Notice of Claim must be in the prescribed statutory form and must:

• Specify a deadline of at least 1 month from the date of service for the freeholder to respond with a Counter-Notice;
• Specify a proposed acquisition date (the date management transfers) that is at least 3 months after the deadline for the freeholder's Counter-Notice; and
• Set out the full statutory particulars proving the building's eligibility and listing the qualifying tenants who are members of the RTM company.

Under Section 81(1) of the 2002 Act, "a claim notice is not invalidated by any inaccuracy in any of the particulars required", though errors in eligibility, premises definition, or notice dates can still fatalise a claim. Following receipt of the Notice of Claim, the freeholder has the right under Section 83 to serve a notice requiring access to inspect common parts or flats on giving at least 10 days' notice.

By the deadline stated in your Claim Notice, the freeholder may serve a Section 84 Counter-Notice which either:

• Admits the claim: The RTM company will automatically take over management on the acquisition date specified in your Section 79 Notice of Claim (the same applies if the freeholder fails to serve a Counter-Notice at all).
• Disputes the claim: The freeholder can only oppose the claim on strict statutory grounds (for example, that the building does not qualify, that fewer than 50% of flats are members, or that statutory notice procedures were not followed).

If the freeholder serves a negative Counter-Notice disputing your claim, the RTM company has strictly 2 months from the date of the Counter-Notice to apply to the First-tier Tribunal (Property Chamber) for a binding determination. If you do not apply within 2 months, the claim is deemed withdrawn.

Contractor notices, information duties, and the acquisition date

Once the Right to Manage is agreed or confirmed, the official acquisition date (when management transfers to the RTM company) is fixed as follows:

• Where the claim is admitted (or no Counter-Notice is served): The acquisition date stated in the original Section 79 Notice of Claim.
• Where a disputed claim is approved by the First-tier Tribunal: Three months after the Tribunal's determination becomes final.
• Where the freeholder initially disputes the claim but later agrees in writing: Three months after the date of the landlord's written agreement.

Section 92 Contractor and Contract Notices

Because existing management contracts between the freeholder and third-party suppliers (such as lift engineers, cleaners, gardeners, and managing agents) do not automatically transfer to the RTM company, the freeholder is legally required under Section 92 to serve two types of notice on or before the determination date (or as soon as reasonably practicable afterwards):

• Contractor Notices (served on each contractor): Informs the contractor that the RTM company is taking over management on the acquisition date and provides the RTM company's name and registered address should the contractor wish to continue providing services.
• Contract Notices (served on the RTM company): Lists the particulars of all existing contracts relating to the building and the contact details of each contractor so the RTM company can decide whether to retain them or appoint new suppliers. (Note: the freeholder is not obliged to provide physical copies of the contracts under Section 92, only notice of their existence).

Section 93 Information Notice, Service Charges, and Landlord Membership

To ensure a smooth handover, the RTM company can serve a Section 93 Duty to Provide Information Notice requiring the freeholder to hand over essential documents—such as buildings insurance schedules, health and safety assessments, service charge accounts, and contracts. The freeholder must comply within 28 days of the notice (though they cannot be compelled to hand them over before the acquisition date itself).

Under Section 94, the freeholder must also transfer all uncommitted service charges (including reserve or sinking funds) held for the building to the RTM company on the acquisition date, or as soon afterwards as is reasonably practicable.

Finally, from the acquisition date onwards, the freeholder (and any intermediate landlords) has the statutory right to become a member of the RTM company. Under the March 2025 Model Articles, votes allocated to landlords are capped at a maximum of one-third of the total votes exercisable by the qualifying leaseholders, ensuring flat owners retain overall control.

Why you should get a building survey before taking over

We strongly recommend arranging a professional RICS building survey before your acquisition date so your new RTM company has a clear schedule of the building's condition, upcoming repair liabilities, and reinstatement value for buildings insurance. This allows you to budget accurately and launch any statutory Section 20 major works consultations promptly. Contact our team for competitive block survey rates when acting for multiple leaseholders in the same building.