Guide · Right to Manage
What is the right to manage (RTM)?
The right to manage lets leaseholders of flats take over running their building from the landlord through an RTM company. What it covers, and what not.
Last reviewed by Phil, founder4 min readPlain text (Markdown)
The short answer
The right to manage (RTM) lets the leaseholders of a block of flats in England and Wales take over the management of their building from the landlord, through a company they set up and control. You don't have to prove the landlord has done anything wrong, and you don't buy the freehold or pay compensation. The landlord keeps the freehold and the ground rent; the RTM company takes on the repairs, insurance, services and service charges.
Key facts
- Created by the Commonhold and Leasehold Reform Act 2002, Part 2 Chapter 1.
- No need to prove the landlord is at fault, and no compensation is payable.
- Run through an RTM company limited by guarantee, owned by the leaseholders.
- The landlord keeps the freehold, the ground rent and the right to forfeit a lease.
- Since 3 March 2025, an RTM company is generally not liable for the landlord's costs of the claim.
- Up to 50% of the building's floor space can now be non-residential.
What the right to manage is
The right to manage is a legal right, created by the Commonhold and Leasehold Reform Act 2002, that lets leaseholders take over the management of their block from the landlord. It applies in England and Wales.
It works through a company. The leaseholders set up an RTM companyRTM companyA private company limited by guarantee, set up by leaseholders, whose object is to acquire and exercise the right to manage their building., invite every other qualifying leaseholder to join, and then serve a claim noticeClaim noticeThe prescribed notice in which an RTM company tells the landlord (and anyone else with management duties under the leases) that it claims the right to manage, and names the date it intends to take over. on the landlord. If the claim succeeds, the company takes over on the acquisition dateAcquisition dateThe date on which an RTM company takes over the management of the building from the landlord..
Two things make it different from other leasehold rights:
- It's "no fault". You don't have to show the landlord or its managing agent has done anything wrong.
- It's free of compensation. You don't buy anything or pay the landlord for the right. You pay your own set-up costs, and since 3 March 2025 you generally don't pay the landlord's costs either (s.87A).
What changes hands, and what doesn't
| Who has it after the acquisition date | |
|---|---|
| Repairs and maintenance of the building | RTM company |
| Buildings insurance | RTM company (the landlord may still insure at its own expense) |
| Services such as cleaning, gardening and lighting | RTM company |
| Setting and collecting the service chargeService chargeThe amount leaseholders pay, under their leases, towards the cost of services, repairs, maintenance, improvements, insurance and management of their building, which goes up or down with the actual costs. | RTM company |
| Fire safety in the common parts | RTM company, as the responsible personResponsible person (fire safety)The person or organisation in control of a building's common parts in connection with a business or undertaking, who is legally responsible for fire safety there under the Fire Safety Order. |
| Approving alterations, sub-letting and similar | RTM company, after notifying the landlord |
| Owning the freehold | Landlord |
| Ground rentGround rentThe rent a leaseholder pays the landlord under the lease, separate from the service charge, which is only payable once the landlord has sent a notice in the prescribed form. | Landlord |
| Forfeiting a lease | Landlord only. An RTM company can never forfeit (s.96(6)(b)) |
| Lease extensions | Landlord |
The leases themselves don't change. The RTM company steps into the landlord's shoes for the management parts of them.
Why leaseholders use it
People usually look into RTM because of one or more of these:
- service charges that seem high, unclear or poorly accounted for;
- repairs that don't get done, or are done badly;
- a landlord or agent who is hard to reach, or absent altogether;
- wanting a say in which contractors and insurers are used.
It's increasingly popular. Our analysis of the Companies House register found more than a thousand new RTM companies in the 12 months to September 2026, the highest number on record.
What it means for you as a director
Taking over is a real job. The RTM company becomes, for most purposes, the landlord under service-charge law. That means its directors must:
- issue lawful service-charge demands and hold the money on trust;
- consult leaseholders before large works (Section 20Section 20 consultationThe legal process of consulting leaseholders before carrying out works, or signing a contract of more than 12 months, that will cost any one leaseholder more than the set threshold.);
- insure and repair the building, and keep it safe from fire;
- keep accounts and answer leaseholders' requests for information;
- run the company: Companies House filings, meetings and records.
None of this is beyond volunteers, but it takes time and care. See Directors' duties and Your first 90 days.
The process in outline
Check you qualify
The building must be self-contained, contain at least two flats, have at least two-thirds of its flats held by qualifying leaseholders, and have no more than 50% non-residential floor space. See Does our building qualify?.
Set up the RTM company
A private company limited by guarantee, with a name ending "RTM Company Limited" and the prescribed articles.
Invite every qualifying leaseholder
Give each one a notice of invitation to participate, in the prescribed form, and wait at least 14 days.
Serve the claim notice
Members must hold at least half of the flats. The notice goes to the landlord and any other party to the leases, with a copy to every qualifying leaseholder.
Take over
If the landlord admits the claim or doesn't reply, the company takes over on the date in the claim notice. If it's disputed, the tribunal decides.
The full detail is in How to claim the right to manage.
Is it worth it?
Reasons for: control over spending and contractors, often lower costs, faster repairs, and no price to pay. Reasons against: the work and responsibility land on volunteers, you can't extend leases or stop paying ground rent, and you need enough neighbours willing to take part.
For a fictional example, at Maple Court (8 flats), five leaseholders join the RTM company and two volunteer as directors. They decide to self-manage, with an accountant for the year-end accounts and a broker for insurance. If the directors later want a break, the company can hire a managing agent of its choice.
If you'd rather own the building outright, compare Right to manage or buy the freehold?.
This is general information, not legal advice. Every building and lease is different. For free initial advice, contact LEASE (The Leasehold Advisory Service): https://www.lease-advice.org/
Questions people ask
Does the right to manage mean we own the building?
No. The landlord keeps the freehold and the ground rent. The RTM company takes over management under the leases: repairs, insurance, services and the service charge. To own the building, leaseholders would need to buy the freehold.
Do we have to prove the landlord or managing agent has done a bad job?
No. The right to manage is a 'no fault' right. If the building and enough leaseholders qualify, and the process is followed correctly, the landlord can't refuse.
Do we have to manage the building ourselves after RTM?
No. The RTM company is responsible, but its directors can hire a managing agent to do some or all of the work. Many small blocks self-manage; others appoint an agent they choose.
Do all the leaseholders have to join?
No. Every qualifying leaseholder must be invited, but the claim only needs members holding at least half of the flats (both flats in a two-flat building). Those who don't join are still covered by the RTM company's management, and can join later.
Can the landlord join the RTM company?
Yes, from the acquisition date the landlord is entitled to be a member. Since 3 March 2025, landlords' votes are capped at one third of the qualifying tenants' votes.
Sources
- Commonhold and Leasehold Reform Act 2002, Part 2 Chapter 1 (right to manage)
- Commonhold and Leasehold Reform Act 2002, s.96 (management functions under leases)
- Commonhold and Leasehold Reform Act 2002, s.87A (costs: general)
- Leasehold and Freehold Reform Act 2024, s.49 (non-residential limit)
- GOV.UK: Right to Manage: a guide for landlords
- LEASE: About the right to manage