How Right to Manage Works: Taking Over Your Block Without Buying the Freehold

Most leaseholders who ask us about Right to Manage (RTM) have reached the same point: the service charge keeps rising, nobody answers emails, the roof has been “on the list” for three years, and the freeholder’s managing agent answers to the freeholder, not to them. Buying the freehold feels like the only way out, and the premium makes it unaffordable.

Right to Manage is the alternative most people have not been told about. It lets the leaseholders of a block of flats take over the running of the building through a company they own, without buying anything and without proving anyone has done anything wrong. This guide explains who qualifies, how the process runs, what the company actually takes on, and what changed on 3 March 2025. If you want a quick answer on your own building first, our Right to Manage page has a six-question eligibility test.

What Right to Manage is, and is not

Right to Manage was created by Part 2, Chapter 1 of the Commonhold and Leasehold Reform Act 2002.¹ It is a no-fault right: the leaseholders do not have to show poor management, and the freeholder cannot refuse simply because they would rather keep control. If the building and the leaseholders meet the statutory tests and the notices are served correctly, the right is acquired.

It is not a purchase. The freeholder keeps the freehold, keeps the ground rent, and keeps the right to forfeit a lease. What transfers is the management: the services, repairs, maintenance, improvements, insurance and general management that the lease currently puts on the landlord (or on a management company named in the lease).² Those functions move to a new company, the RTM company, which the leaseholders control.

In practice the RTM company steps into the landlord’s shoes for the day-to-day running of the block. It sets the budget, demands the service charges, appoints (or dismisses) the managing agent, chooses the contractors and arranges the insurance.

Who qualifies

There are two sets of tests: one for the building, one for the leaseholders.³

The building must be a self-contained building, or a self-contained part of one (a vertical division with its own services, or services that could be separated without significant interruption). It must contain at least two flats held by qualifying tenants, and at least two-thirds of all the flats must be held by qualifying tenants. Three kinds of building are excluded:

• Mixed-use buildings where the non-residential parts are more than 50% of the internal floor area, ignoring the common parts. Until 3 March 2025 the limit was 25%, which ruled out many London blocks with a shop, café or office on the ground floor. The Leasehold and Freehold Reform Act 2024 raised it to 50%.⁴
• Small conversions with a resident landlord: a converted house (not purpose-built) of four or fewer flats where the freeholder or an adult member of their family has lived in one of them as their only or principal home for the last twelve months.
• Buildings where the landlord is a local housing authority.

A qualifying tenant is simply a leaseholder holding a long lease, meaning one originally granted for more than 21 years. There is no residence test. Buy-to-let owners qualify, overseas owners qualify, and a leaseholder with several flats counts once per flat. Shared ownership leases qualify if the leaseholder has staircased to 100%, or in certain other cases.

Participation. Not every leaseholder has to join. On the day the claim notice is served, the RTM company’s membership must include the qualifying tenants of at least half the flats in the building.⁵

A worked example: a purpose-built block of 12 flats with a dry cleaner on the ground floor taking up around 30% of the floor area. Ten of the flats are on 125-year leases; two are let by the freeholder on short tenancies. The building passes: it is self-contained, the shop is under 50%, and 10 of 12 flats (83%) are held on long leases, comfortably above the two-thirds minimum of 8. The leaseholders need at least 6 of the 12 flats to join the company before serving the claim. Before March 2025 the same building would have failed on the shop alone.

The RTM company

The vehicle is a private company limited by guarantee whose articles follow a prescribed model.⁶ Its name must end in “RTM Company Limited”, and every qualifying tenant has the right to join. The landlord also has the right to become a member once the right has been acquired, which surprises some leaseholders, but the landlord does not get a controlling vote.⁷

Setting it up is cheap and quick, but it does create a real company with real obligations: a confirmation statement and accounts at Companies House every year, directors who must now verify their identity, and the separate duty to account for service charge money as trust funds rather than company income. We have covered the running of a leaseholder-owned company in our guide to running a residents’ management company, the two-sets-of-books point in service charge accounts vs Companies House accounts, and the identity check in Companies House director personal code. All three apply to an RTM company from day one.

The process and the timetable

The Act lays down a fixed sequence of notices with minimum periods, which is why a well-run claim takes around four to six months and a disputed one longer.⁸

1. Check eligibility properly. Read the leases and the freehold title, measure any commercial floor area, and identify every landlord. Many blocks have an intermediate landlord (a head lessee) as well as the freeholder, and both must be served.
2. Incorporate the RTM company at Companies House with the model articles.
3. Notice of Invitation to Participate (section 78). Every qualifying tenant who is not already a member must be formally invited to join. The claim notice cannot be served until at least 14 days after these invitations go out.
4. Claim notice (section 79). The company serves the claim notice on the freeholder, any intermediate landlord, any other party to the leases (such as a management company named in them) and any manager appointed by a tribunal. A copy goes to every qualifying tenant. The notice must name a date for any counter-notice, which cannot be earlier than one month after service, and an acquisition date, which cannot be earlier than three months after the counter-notice date.
5. Counter-notice (section 84). The landlord may admit the claim, or dispute it on specified grounds. A counter-notice can only challenge eligibility; it cannot object because the landlord disagrees with the leaseholders’ plans. If no counter-notice is served, the right is acquired on the date in the claim notice.
6. Tribunal, only if disputed. The RTM company must apply to the First-tier Tribunal (Property Chamber) within two months of a disputing counter-notice, or the claim lapses. If the tribunal finds for the company, the acquisition date becomes three months after that decision becomes final.
7. Acquisition date. Management transfers. The landlord must hand over the uncommitted service charge funds, and both sides deal with existing contracts under the contract and contractor notice procedure.

Run at the statutory minimums with no dispute, the shortest possible claim is a little over four months from the first invitation to acquisition. Real claims take longer because leaseholders need time to be found and persuaded, leases need reading, and freeholders rarely admit a claim on day one.

Getting the notices wrong used to be fatal. For twenty years, landlords defeated otherwise sound claims by pointing to a procedural slip. The Supreme Court changed the temperature in 2024, holding that a failure to serve the claim notice on an intermediate landlord of the common parts did not invalidate the claim where that landlord had no management functions and could still have put its case.⁹ The Court of Appeal reached a similar view in 2025 on a missed invitation to a single qualifying tenant.¹⁰ These are welcome decisions, but they are a safety net for honest mistakes, not permission to be careless. Serve everyone, keep proof of service, and have a specialist solicitor check the notices before they go.

What changed on 3 March 2025

Three provisions of the Leasehold and Freehold Reform Act 2024 were brought into force for Right to Manage on 3 March 2025.¹¹ Between them they remove the two biggest deterrents.

Mixed-use buildings qualify more often. The non-residential limit rose from 25% to 50% of internal floor area, as above.

Leaseholders no longer pay the freeholder’s costs by default. Under the original 2002 Act, the RTM company was liable for the landlord’s reasonable costs of dealing with the claim, win or lose, which gave landlords every incentive to run up bills. Now each side bears its own costs. The RTM company is only liable for the landlord’s costs if a court or tribunal orders it, if the claim is withdrawn or ceases to have effect, or if the company has acted unreasonably.¹² A landlord also cannot recover its non-litigation costs of an RTM claim through the service charge, so the money cannot come back in through the side door.¹³

One forum. Disputes about compliance with the RTM provisions now go to the First-tier Tribunal rather than the county court, and first-instance applications can no longer be started in the High Court.¹⁴

If you looked at Right to Manage before 2025 and decided the cost risk was too high, or were told your building was out because of the ground-floor shop, it is worth looking again.

What the RTM company takes on

From the acquisition date the company holds the landlord’s management functions under every lease in the building, and is responsible to the leaseholders and to the landlord for carrying them out.² Concretely, that means:

• Service charges. The company demands and collects them, holds them on trust, produces the annual accounts and deals with section 20 consultation for major works. Our posts on the Section 20 framework and budgets and reserves apply to RTM companies exactly as they do to freeholders.
• Insurance. The company must insure the building to the standard the leases require, and the landlord is entitled to be noted and to see the policy.
• Repairs, maintenance and compliance. Fire risk assessments, the Building Safety Act duties for taller buildings, lifts, water systems, asbestos: all of it.
• Approvals. Where a lease needs the landlord’s consent (alterations, subletting, pets), the RTM company now gives it, but it must first notify the landlord: 30 days’ notice for assignments, underlettings, charges, parting with possession and structural alterations or improvements, 14 days for anything else. The landlord can object, and a disagreement goes to the tribunal.¹⁵
• Enforcing the lease. The company can enforce the leaseholders’ covenants (other than by forfeiture) and must keep the landlord informed of breaches it cannot resolve.¹⁶

And what it does not get:

• the freehold, or any right to extend leases or vary them on its own;
• the ground rent, which stays with the landlord;
• forfeiture and possession, which remain the landlord’s alone;
• management of any non-residential units or of flats let by the landlord on short tenancies, which stay with the landlord;
• an escape from the leases: the RTM company can only do what the leases allow the landlord to do, so a badly drafted lease is still a badly drafted lease.

The right can also be lost. It ends if the RTM company is wound up or struck off, if the company and the landlord agree, or if a tribunal appoints a manager over the building.¹⁷ A company that lets its Companies House filings lapse is putting the whole acquisition at risk, which is one reason even very small RTM companies should have someone minding the company secretarial side.

Right to Manage compared with the alternatives

	Right to Manage	Buying the freehold (collective enfranchisement)	Tribunal-appointed manager
Premium payable	None	Yes, the value of the freehold	None
Need to prove fault	No	No	Yes, serious management failure
Who ends up in control	Leaseholders’ RTM company	Leaseholders’ freehold company	A professional manager answering to the tribunal
Ground rent	Stays with freeholder	Ends for participants	Stays with freeholder
Lease extensions	Still from freeholder	Participants can grant themselves 999 years	Still from freeholder
Typical timescale	4 to 6 months, longer if disputed	6 to 18 months, often with a valuation dispute	6 to 12 months

Right to Manage is the fastest and cheapest route to control. Collective enfranchisement delivers more, at a price. The two are not mutually exclusive: many blocks acquire the right to manage first, fix the management, build up the reserves and then enfranchise a few years later from a position of strength.

Where a managing agent fits in

The legal work, the notices and any tribunal application are a solicitor’s job, and we work alongside specialist leasehold solicitors rather than pretending to be one. What a managing agent brings is everything on either side of the legal process:

• a realistic view of eligibility before anyone spends money, including the uncomfortable conversation when a building does not qualify;
• help getting the leaseholders of half the flats signed up, which is the step that actually stalls most claims;
• a budget for the first year, so the leaseholders know what they are voting for before they vote;
• the handover itself: chasing the uncommitted service charge funds, novating or replacing contracts, getting the insurance re-placed without a gap, and picking up any section 20 project that is mid-flight. We have written about why a takeover is rarely plug-and-play and how the first year’s fees work when management changes hands mid-year; both apply with full force to a new RTM company.

If you are weighing it up, start with the eligibility test on our Right to Manage page, and if the building looks like it passes, talk to us. We will tell you honestly whether it is worth pursuing.

This article is general information for leaseholders in England, not legal advice on a particular building. Eligibility turns on the exact wording of the leases and the title, and the notices have to be right first time.

Bibliography

Primary legislation

• Commonhold and Leasehold Reform Act 2002, c. 15, Part 2, Chapter 1 (ss. 71–113) and Schedules 6 and 7. Available at: legislation.gov.uk
• Leasehold and Freehold Reform Act 2024, c. 22, ss. 49–52 and 64. Available at: legislation.gov.uk
• The Leasehold and Freehold Reform Act 2024 (Commencement No. 3) Regulations 2025, SI 2025/131. Available at: legislation.gov.uk
• The RTM Companies (Model Articles) (England) Regulations 2009, SI 2009/2767. Available at: legislation.gov.uk
• The Right to Manage (Prescribed Particulars and Forms) (England) Regulations 2010, SI 2010/825.

Case law

• A1 Properties (Sunderland) Ltd v Tudor Studios RTM Company Ltd [2024] UKSC 27.
• Avon Freeholds Ltd v Cresta Court E RTM Company Ltd [2025] EWCA Civ 1016.

Further reading

• The Leasehold Advisory Service (LEASE), Right to manage fact sheet and guidance. Available at: lease-advice.org
• HM Courts & Tribunals Service, Leasehold 8: Applications relating to Right to Manage (First-tier Tribunal guidance). Available at: gov.uk

Footnotes

1. Commonhold and Leasehold Reform Act 2002, s. 71 introduces the right; ss. 72–113 and Schedules 6 and 7 set out the conditions, procedure and consequences. ↩

2. Commonhold and Leasehold Reform Act 2002, s. 96 defines “management functions” as functions with respect to services, repairs, maintenance, improvements, insurance and management, and transfers them to the RTM company from the acquisition date; s. 97 makes the company responsible for them to both the tenants and the landlord. Functions relating to re-entry or forfeiture are expressly excluded (s. 96(6)). ↩ ↩²

3. Commonhold and Leasehold Reform Act 2002, s. 72 (premises to which the right applies), s. 75 (qualifying tenants), s. 76 (long leases) and Schedule 6 (excluded premises). ↩

4. Leasehold and Freehold Reform Act 2024, s. 49, amending paragraph 1 of Schedule 6 to the 2002 Act to substitute 50% for 25%; brought into force on 3 March 2025 by SI 2025/131, reg. 2. ↩

5. Commonhold and Leasehold Reform Act 2002, s. 79(5): the claim notice may not be given unless the membership of the RTM company includes a number of qualifying tenants not less than one-half of the total number of flats in the premises. ↩

6. Commonhold and Leasehold Reform Act 2002, s. 73 and s. 74(1); the RTM Companies (Model Articles) (England) Regulations 2009, SI 2009/2767. ↩

7. Commonhold and Leasehold Reform Act 2002, s. 74(1)(b): landlords under leases of the whole or any part of the premises are entitled to be members once the right to manage has been acquired. The model articles weight voting so that the qualifying tenants retain control. ↩

8. Commonhold and Leasehold Reform Act 2002, s. 78 (notice inviting participation), s. 79(2) (at least 14 days before the claim notice), s. 79(6)–(8) (who must be served), s. 80(6)–(7) (counter-notice date not earlier than one month after service; acquisition date not earlier than three months after that), s. 84 (counter-notice and the two-month deadline for a tribunal application) and s. 90 (the acquisition date where a claim is disputed). ↩

9. A1 Properties (Sunderland) Ltd v Tudor Studios RTM Company Ltd [2024] UKSC 27: a failure to serve the claim notice on a landlord under s. 79(6)(a) does not always invalidate the acquisition; on the facts, the omitted intermediate landlord had no management functions and the claim stood. ↩

10. Avon Freeholds Ltd v Cresta Court E RTM Company Ltd [2025] EWCA Civ 1016: a landlord cannot defeat a claim by counter-notice merely because one qualifying tenant was not given a notice inviting participation, where the company otherwise meets the substantive conditions. ↩

11. The Leasehold and Freehold Reform Act 2024 (Commencement No. 3) Regulations 2025, SI 2025/131, reg. 2, bringing into force ss. 49, 50, 51, 52 and (as regards the right to manage) s. 64 of the 2024 Act on 3 March 2025. ↩

12. Leasehold and Freehold Reform Act 2024, s. 50, substituting new costs provisions for s. 88 of the 2002 Act: the RTM company and its members are not liable for the landlord’s costs except where ordered by a court or tribunal, where the claim notice is withdrawn or ceases to have effect, or where the company has acted unreasonably. ↩

13. Leasehold and Freehold Reform Act 2024, s. 64, inserting s. 20J into the Landlord and Tenant Act 1985, which prevents a landlord recovering non-litigation costs of a right to manage claim through the service charge. ↩

14. Leasehold and Freehold Reform Act 2024, s. 51 (compliance with obligations under Chapter 1 of Part 2 of the 2002 Act to be determined by the appropriate tribunal) and s. 52 (no first-instance applications to the High Court in tribunal matters). ↩

15. Commonhold and Leasehold Reform Act 2002, s. 98 (approvals): 30 days’ notice to the landlord for an approval relating to assignment, underletting, charging, parting with possession, or the making of structural alterations or improvements, and 14 days in other cases; s. 99 deals with the landlord’s objections and the tribunal’s role. ↩

16. Commonhold and Leasehold Reform Act 2002, s. 100 (enforcement of tenant covenants by the RTM company) and s. 101 (duty to monitor and report failures to comply to the landlord). ↩

17. Commonhold and Leasehold Reform Act 2002, s. 105: the right to manage ceases where the RTM company is wound up or struck off, where the company and the landlord agree, or where a manager is appointed under Part 2 of the Landlord and Tenant Act 1987. ↩