How to Qualify and Use the Right to Manage in the UK

If you are a leaseholder in the UK and facing issues with repairs, costly service charges, or your landlord is unresponsive to your concerns, the Right to Manage law provides a solution. Real Estate London Agent aims to guide you through every stage of the process, helping you understand your legal rights. The RTM can help you to improve the management, raise the level of transparency, and save your investment for the future.

What is Right to Manage?

The RTM meaning Right to Manage, is a statutory right that enables qualifying leaseholders to take control of how their building is managed, even against the landlord’s wishes. This right was established under the Commonhold and Leasehold Reform Act 2002, enabling residents to have more control. The freeholder remains the legal owner; however, they will hand over management responsibility to the leaseholders. Leaseholders may choose RTM to gain added quality and control over costs, without needing to prove existing poor management.

Do I qualify for RTM?

Before applying for the application, it is important to understand that it can only be achieved when the building itself meets certain legal requirements from UK property law. 

Qualifying Criteria for Right to Manage

• You can qualify for it if your building consists of self-contained flats rather than individual houses.
• There must be at least two leasehold flats in the building or block for the right to apply.
• A minimum of two-thirds (66%+) of the flats should have long leases originally granted for more than 21 years.
• The property must mainly be residential, with no more than 50% commercial space.
• To officially take over management, at least half of the qualifying leaseholders must join the RTM Company as members

How Long Does it take to get the Right to Manage process?

Securing it usually takes approximately 4 to 8 months, and sometimes longer. The specific length of the process often depends on the landlord or current property manager and their responsiveness and cooperation. Completing the process can be delayed if there is a dispute or if the paperwork is not complete. Keeping organised and knowing your rights can keep the process on track.

How does an RTM Company work?

An RTM Company is a special company formed by qualifying leaseholders to take control of the building’s management from the freeholder. Once the Company is officially set up, it gains the authority to handle all management responsibilities that are written in the lease. Leaseholders also have the option to manage the building themselves if they prefer not to hire external agents. 

The company must also follow the rules defined in The RTM Companies (England) Regulations 2009, which apply to all existing and future RTM companies in England. RTM companies only operate in England and Wales, and they do not exist in Scotland or Northern Ireland.

Responsibilities of a RTM Company

Here are some responsibilities of RTM Company that are given below:

• RTM directors are responsible for the day-to-day management of the building.
• The company is responsible for collecting and managing service charges.
• Directors have a legal duty to act lawfully for the benefit of both the company and leaseholders.
• RTM companies must respond to leaseholder enquiries and complaints.
• The company is responsible for taking out suitable building insurance.
• RTM companies handle service agreements, such as gas, electricity, and garden maintenance. 
• They prepare 5 to 10-year maintenance plans and manage reserve funds for future repairs.

Why is Having the Right to Manage Beneficial for Leaseholders?

Having the Right to Manage benefits leaseholders by giving them control over their building’s management, especially if the current managing agent is underperforming. Leaseholders can form a board of directors to set the budget, decide on services, schedule works, choose contractors, and ensure the service charges offer good value for money. This allows leaseholders to directly influence the quality, efficiency, and cost-effectiveness of their building’s management.

Right To Manage vs Freehold Purchase

There are two different ways for leaseholders to gain control over their building. Here are the detailed differences that are given below:

Pros and Cons of Right to Manage

Here are the pros and cons of it that are given below:

How to Exercise the Right to Manage?

Once your company is fully set up, the process to officially take over RTM Property Management begins.

• Send a notice to all leaseholders to invite them to join the RTM Company.
• After at least 14 days, the company can issue a claim notice to the freeholder.
• The claim notice informs the freeholder that the RTM Company wants to take over the management.
• The claim notice must include a deadline for the freeholder to submit the counter notice..
• This can only happen three months or more after the counter-notice deadline
• If the freeholder does not dispute the claim notice, the company legally takes over all management responsibilities.

What are the New Right to Manage Rules?

The Leasehold and Freehold Reform Act 2024 introduced two major changes, which came into effect on 3 March 2025.

 Non-Residential Limit 

Previously, a building could not qualify for RTM if more than 25% of its internal floor area was commercial. The new rule raises this threshold to 50%. This means many more mixed-use buildings can now qualify for the it.

Freeholders Must Now Pay Their Own Costs

Before March 2025, leaseholders had to pay the freeholder’s reasonable costs during the process. The new law requires the freeholder to cover their own legal and admin costs. Leaseholders will only be responsible for their own costs, making the process more affordable.

Conclusion

When leaseholders are given the Right to Manage UK, they can influence how their building is managed. With the changes to the Act in 2024, raising the non-residential limits considerably and with freeholders covering their expenses, it has become easier and more accessible for leaseholders. This option for leaseholders willing to take responsibility and a way to protect their investment increases the value of their property.

Frequently Asked Questions