Right to Manage (RTM): The Complete Step-by-Step Guide
How to set up an RTM company, check whether your building qualifies, invite leaseholders to join, serve the notices and take over management
If you’ve ever thought:
“Surely we should be able to have some say in how our own building is managed?”
you may have come across Right to Manage (RTM).
RTM can give qualifying leaseholders the legal right to take over the management of their building without having to buy the freehold.
And importantly, you don’t have to prove that your freeholder or managing agent has done anything wrong.
RTM is designed as a “no-fault” right. If the legal requirements are met, qualifying leaseholders can pursue it simply because they want to take control of the management. (GOV.UK)
But there is a catch.
The RTM process is highly procedural.
The company needs to be set up correctly. The right leaseholders need to participate. The correct notices need to be served on the correct people. Deadlines matter.
A small procedural mistake can potentially cause serious problems.
So here’s a practical guide to the process.
What Is Right to Manage?
The Right to Manage allows qualifying leaseholders to take over certain management functions from the landlord.
The freeholder does not lose ownership of the building.
Instead, the RTM company takes over the management responsibilities covered by the legislation.
That can include matters such as:
Repairs and maintenance
Communal areas
Service charge management
Building insurance
Contractors
Cleaning
Maintenance contracts
Managing agents
Day-to-day management decisions
The RTM company can manage the building itself or appoint a professional managing agent to do it. (GOV.UK)
That last point is important.
RTM does not mean leaseholders suddenly have to become full-time property managers.
You can have control while still paying professionals to carry out the day-to-day work.
Step 1: Check Whether Your Building Qualifies
Before setting up an RTM company, you need to establish whether the building is actually eligible.
This is one of the first areas where professional advice can be valuable because RTM eligibility depends on the precise circumstances of the building and leases.
Broadly, the government guidance states that:
The building must be made up of flats.
At least two-thirds of the flats must be leasehold flats with leases originally granted for more than 21 years.
At least 50% of the building must be residential.
At least half of the flats must ultimately be represented by members of the RTM company when the claim is made. (GOV.UK)
The position can become more complicated with:
Mixed-use buildings
Commercial units
Converted buildings
Very small blocks
Multiple buildings
Shared facilities
Intermediate landlords
Unusual lease structures
The commercial-space rule:
This is particularly worth checking.
The Leasehold and Freehold Reform Act 2024 increased the non-residential limit for RTM from 25% to 50%, meaning buildings can potentially qualify where up to 50% of the relevant floor space is used for non-residential purposes. (Legislation.gov.uk)
However, don’t simply look at a property’s estate agent description and assume you’ve passed the test.
The calculation and the legislation need to be considered properly.
Step 2: Identify the Flats and Leaseholders
Once you’ve established that the building may qualify, you need to identify the flats and the relevant leaseholders.
This sounds straightforward.
It isn’t always.
You should establish:
How many flats are in the building?
Which flats have qualifying leases?
Who is the registered proprietor?
Who is the qualifying tenant?
Are there intermediate landlords?
Are any flats owned by the freeholder?
Are any flats owned by companies?
Are any properties currently being transferred?
Are there multiple registered owners?
Are there unusual ownership arrangements?
This is where the Land Registry title registers become particularly important.
Don’t rely solely on a residents’ spreadsheet that was created five years ago.
Ownership changes.
People sell flats.
Companies purchase flats.
Probate happens.
Applications can be pending at HM Land Registry.
And the person living in a flat isn’t necessarily the person who needs to be treated as the legal owner for the purposes of the RTM process.
Get the ownership information right before you start serving notices.
Step 3: Get the Lease Information
You should also review the leases.
Among other things, you’ll want to understand:
The length of each lease
The parties to the lease
Service charge provisions
Repairing obligations
Insurance provisions
Management provisions
Any unusual rights or restrictions
Whether there are intermediate landlords
This isn’t simply an administrative exercise.
The leases help you understand what management functions actually exist and who currently performs them.
It can also help identify relevant landlords or other parties who may need to be involved in the RTM claim.
Step 4: Get the Leaseholders Interested
You don’t necessarily need every leaseholder in the building to support RTM.
But you do need sufficient participation to satisfy the statutory requirements.
This means you should start building support early.
Explain to leaseholders:
What RTM is
What it does
What it doesn’t do
What the likely costs are
What the process involves
What happens after RTM
Whether the company intends to appoint a managing agent
Don’t sell RTM as:
“We’re getting rid of the freeholder.”
You’re not.
The freeholder retains ownership.
Instead, explain that the RTM company is seeking to acquire the right to manage the building.
Step 5: Set Up the RTM Company
This is the legal vehicle that will exercise the Right to Manage.
An RTM company is a private company specifically established for the purpose of acquiring and exercising the RTM.
The company needs to be incorporated correctly and its constitutional documents need to be appropriate.
You’ll also need to consider:
Company name
Registered office
Directors
Members
Articles of association
Companies House filings
Membership arrangements
Record keeping
Companies House requirements continue after incorporation too. Directors have ongoing responsibilities, including filing the company’s confirmation statement and accounts where applicable. (GOV.UK)
Don’t confuse the RTM company with an ordinary RMC
An RMC and an RTM company can look similar from the outside, but they are not automatically the same thing.
An RMC may already exist because the leases require leaseholders to participate in the management company.
An RTM company is specifically established to exercise the statutory Right to Manage.
Understanding which company you have — and what powers it actually has — is important.
Step 6: Invite Other Qualifying Leaseholders to Participate
This is an important stage.
The RTM legislation contains a formal procedure for inviting qualifying tenants who aren’t already members of the RTM company to participate.
The RTM company must serve the appropriate Notice of Invitation to Participate.
The purpose is to give qualifying leaseholders an opportunity to become members and participate in the RTM process.
Don’t treat this as a casual email saying:
“We’re doing RTM if anyone wants to join.”
There are statutory requirements surrounding the notice.
The correct prescribed information and procedure should be followed.
The timing of this stage is also important because participation requirements need to be satisfied before the claim notice is served.
Step 7: Make Sure You Have Enough Participating Leaseholders
This is one of the biggest practical hurdles.
Before serving the RTM claim notice, you need to make sure the RTM company has the required level of participation.
Broadly, at least half of the flats in the building must be represented by qualifying leaseholders who are members of the RTM company when the claim is made. (GOV.UK)
Example
Imagine a building containing:
20 flats
You would generally need at least:
10 flats represented by participating qualifying leaseholders
for the relevant membership threshold.
But don’t simply count signatures on a petition.
You need to establish that the people participating are actually the people who qualify and that the company membership and documentation are correct.
Step 8: Obtain the Information Needed for the Claim
Before serving the claim notice, the RTM company needs the information required to prepare the claim properly.
The RTM legislation provides mechanisms for obtaining information from relevant people where it is reasonably required for the RTM claim.
This can be particularly important where the RTM company doesn’t have all the information it needs about:
The building
Landlords
Intermediate landlords
Management arrangements
Relevant parties
Ownership
The existing management structure
The information-gathering stage should not be treated as an afterthought.
Good information at the beginning makes the rest of the RTM process much safer.
Step 9: Prepare the RTM Claim Notice
This is the big one.
The Notice of Claim is the formal notice by which the RTM company claims the Right to Manage.
It needs to be served on the appropriate parties.
Depending on the building and management structure, this can include the landlord/freeholder and other relevant landlords or parties.
The notice needs to contain the information required by the legislation.
It also sets out the proposed date on which the RTM company intends to acquire the right to manage.
This is not the place to improvise.
You shouldn’t simply download an old RTM notice from the internet and change the names.
The information needs to correspond with the actual building, company, leaseholders and relevant parties.
Accuracy matters.
Step 10: Serve the Claim Notice Correctly
A beautifully prepared claim notice isn’t much use if it isn’t properly served.
This is another area where RTM claims can become technically difficult.
You need to establish:
Who must receive the notice
Where each notice should be served
Whether there are additional relevant parties
What evidence you will retain of service
Whether the statutory deadlines have been complied with
Keep a complete service record.
For every notice, retain evidence of:
The recipient
The address
The method of service
The date of service
The actual notice served
Any supporting documents
Proof of posting/delivery where applicable
Think of it as building an audit trail.
If somebody later says:
“We never received that.”
you don’t want your evidence to consist of:
“I’m pretty sure we sent it.”
Step 11: Wait for the Counter-Notice
After receiving the claim notice, the relevant landlord or other recipient has an opportunity to respond.
This is known as the Counter-Notice.
The counter-notice can admit the RTM company’s entitlement or dispute the claim.
The notice of claim itself should specify the relevant deadline.
The government guidance confirms that a landlord receiving a claim notice can either accept the claim or dispute it, with the response deadline subject to statutory requirements. (GOV.UK)
What happens if the landlord disputes RTM?
Don’t panic.
A disputed claim isn’t automatically the end of the process.
If the RTM company believes it is entitled to acquire RTM, there may be a route to the First-tier Tribunal (Property Chamber) to determine the dispute.
But this is exactly why the claim should have been prepared properly in the first place.
Step 12: Deal With Any RTM Dispute
If a counter-notice disputes the claim, the RTM company needs to understand why.
The issue might relate to eligibility or participation.
The company should then assess:
What ground is being relied upon?
Is the objection actually valid?
Does the company have evidence to rebut it?
Has a procedural requirement been missed?
Is a Tribunal application required?
What are the costs and risks of continuing?
The First-tier Tribunal (Property Chamber) has an RTM application process, including the current Leasehold 8 form for RTM entitlement and disputes. (GOV.UK)
At this stage, specialist legal advice may be appropriate.
Step 13: Prepare for the Acquisition Date
Assuming the claim succeeds and there is no unresolved dispute preventing acquisition, the next major milestone is the date of acquisition.
This is the date when management transfers to the RTM company.
The government guidance explains that the acquisition date depends on whether the claim is accepted or disputed and subsequently determined. (GOV.UK)
But here’s something many RTM groups don’t think about early enough:
Winning RTM isn’t the finish line.
It’s the beginning of actually managing the building.
Step 14: Prepare the Management Handover
Before the acquisition date, you should be preparing for the takeover.
Think about:
Managing agent
Are you going to appoint one?
If so, start tendering before the acquisition date.
Bank account
Where will service charge money be held?
Service charge
How will demands be issued?
How will payments be collected?
Insurance
What buildings insurance arrangements need to be in place?
Contractors
Who maintains:
Lifts
Fire systems
Cleaning
Grounds
Electrical systems
Communal lighting
Doors
Roofs
Other communal services?
Records
What information needs to be handed over?
For example:
Service charge accounts
Budgets
Contractor contracts
Insurance documents
Maintenance records
Fire safety information
Major works information
Leaseholder information
Arrears information
Asset information
The better prepared you are before acquisition, the smoother the handover is likely to be.
Step 15: Choose Your Managing Agent Carefully
One of the biggest mistakes RTM companies make is waiting until the last minute to think about management.
Then the acquisition date approaches.
Someone says:
“We need a managing agent.”
Three companies are contacted.
The first one responds.
Everyone is tired.
The quote looks reasonable.
Job done.
Not necessarily.
Your managing agent can have a huge influence on how effectively your RTM company operates.
Before appointing one, compare:
Management fees
Inspection frequency
Repairs
Contractor management
Major works fees
Section 20 charges
Accounts
Company secretarial services
Meetings
Arrears
Insurance administration
Out-of-hours arrangements
Contract length
Termination provisions
Additional fees
And importantly:
Ask whether the agent actually understands RTM companies.
The RTM company is the client.
The managing agent should be providing professional services to the company - not becoming the company.
Step 16: Take Control Properly
Once RTM has been acquired, the company needs to operate as a real organisation.
Directors have responsibilities.
The company needs to maintain proper records.
Financial management matters.
Service charge administration matters.
Contractors need to be managed.
Compliance matters.
Leaseholders need communication.
And decisions need to be properly documented.
RTM isn’t simply:
“We got rid of the old managing agent.”
It is:
“We now have responsibility for managing the building properly.”
That distinction is crucial.
The RTM Process at a Glance
Here’s the simplified version:
1. Check eligibility
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2. Identify flats, leaseholders and relevant parties
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3. Review leases and management arrangements
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4. Build leaseholder participation
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5. Incorporate the RTM company
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6. Invite qualifying leaseholders to participate
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7. Confirm the membership threshold
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8. Obtain required information
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9. Prepare the Claim Notice
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10. Serve the Claim Notice
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11. Receive the Counter-Notice
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12. Deal with any dispute
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13. Reach the acquisition date
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14. Complete the management handover
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15. Put the new management arrangements into operation
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16. Run the RTM company properly
Common RTM Mistakes
Mistake 1: Starting with the notices
Don’t begin by downloading a template and filling in names.
Start with eligibility.
Mistake 2: Getting the ownership information wrong
Land Registry information should be checked carefully.
A flat may have changed hands, have multiple proprietors or have a pending registration issue.
Mistake 3: Assuming every resident is a qualifying member
The person living in a flat isn’t necessarily the person who should be treated as the qualifying leaseholder.
Mistake 4: Ignoring the notice procedure
RTM is highly procedural.
Don’t assume that sending an ordinary email is equivalent to serving a statutory notice.
Mistake 5: Forgetting relevant parties
The freeholder may not be the only party who needs to be considered.
Intermediate landlords and other relevant parties can matter.
Mistake 6: Leaving management preparation until the end
An RTM company can successfully acquire RTM and then discover it has no idea who is going to manage the building.
Start planning the handover early.
Mistake 7: Assuming RTM means leaseholders manage everything themselves
It doesn’t.
An RTM company can appoint a professional managing agent.
Mistake 8: Treating RTM as a battle
RTM is a statutory process.
The objective isn’t to “beat” the freeholder.
The objective is to lawfully acquire the right to manage and then manage the building properly.
What Happens to the Freeholder?
The freeholder doesn’t disappear.
They still own the freehold.
RTM changes who exercises the management functions covered by the legislation.
The landlord also remains involved in certain ways under the RTM framework.
For example, the government guidance explains that the landlord can become a member of the RTM company and has voting rights subject to the statutory rules. (GOV.UK)
This is another reason why RTM should not be described as “buying the freehold”.
RTM gives management control. It doesn’t transfer ownership of the freehold.
Is RTM Worth Doing?
For many qualifying buildings, it can be.
But it isn’t automatically the best answer for every block.
You should consider:
The size of the building
The existing management structure
The quality of the current managing agent
Service charge costs
Leaseholder support
The complexity of the building
Major works
Building safety responsibilities
Commercial areas
The willingness of leaseholders to participate
The cost of the RTM process
What happens after acquisition
And remember:
You don’t need to prove bad management to exercise RTM.
That’s one of its biggest attractions.
If the legal requirements are satisfied, qualifying leaseholders can pursue the right without first proving that the landlord or managing agent has mismanaged the building. (GOV.UK)
Need Help With an RTM Claim?
RTM can look deceptively simple when reduced to a few bullet points.
In reality, there are a lot of moving parts.
The company needs to be set up correctly.
The leaseholders need to be identified correctly.
The participation requirements need to be satisfied.
The notices need to contain the right information.
The right parties need to be served.
The deadlines need to be monitored.
And once RTM is acquired, the company needs to be ready to actually manage the building.
Easy Leasehold can help leaseholders and RTM companies navigate the practical side of the process.
We can assist with areas including:
RTM eligibility and initial assessment
RTM company setup
Leaseholder participation
Reviewing ownership information
Preparing for the RTM process
Notice and procedural coordination
RTM project management
Managing agent tendering
Management handover planning
Post-RTM management strategy
RMC and RTM consultancy
Where specialist legal advice is required, we can also help identify where the matter needs to be referred to an appropriate legal professional.
The aim is simple:
Make the RTM process easier to understand, reduce avoidable mistakes and help leaseholders take control of their building properly.
Important Note
This guide is intended as general information about the Right to Manage process in England and Wales. RTM legislation is technical and the eligibility requirements, notices, deadlines and procedural requirements depend on the circumstances of the particular building.
Do not rely on a general guide alone when preparing or serving statutory notices. The legislation and current prescribed requirements should be checked for the specific claim, and specialist legal advice should be obtained where appropriate.
Easy Leasehold
Independent leasehold consultancy for leaseholders, RMCs and RTM companies.