Exercising Your Right to Manage
How leaseholders in a qualifying flat can take over the management of their building from the freeholder without having to prove fault or pay compensation.
Overview
The right to manage (RTM) was introduced by the Commonhold and Leasehold Reform Act 2002 to give leaseholders of flats the ability to take over the management of their building from the freeholder (landlord), regardless of the quality of existing management and without having to pay compensation. The right is exercised through a right to manage company (RTM company) — a company limited by guarantee of which all qualifying leaseholders are eligible to be members. The RTM company, once it has acquired the right, takes over the landlord's management functions under the existing leases. The Leasehold and Freehold Reform Act 2024 has made further amendments, though many provisions remain subject to commencement.
Who Can Use This Process
- You are likely eligible to use this guide if your situation involves exercising your right to manage.
- You have a genuine legal basis for the matter (contract, tort, statutory right, etc.).
- You have made reasonable attempts to resolve the matter directly with the other party first.
Step-by-Step Process
Form the RTM Company
The first step is to incorporate the RTM company. This must be a private company limited by guarantee, formed in accordance with the 2002 Act. The company must have as its articles of association the prescribed form set out in the RTM Companies (Model Articles) (England) Regulations 2009. The RTM company must be incorporated before the claim notice is served. Leaseholders wishing to exercise the right must be offered membership of the RTM company.
- Use a solicitor familiar with RTM to set up the company — incorrect articles can invalidate the claim
- At least 50% of the qualifying leaseholders must participate — so canvass support early
- Directors of the RTM company will take on management responsibilities — ensure someone is willing to take on this role
- Companies House registration costs £50 (online)
Eligibility Check — The Qualifying Criteria
Before serving the claim notice, ensure the building qualifies. The key criteria are: (1) the premises must consist of a self-contained building or part of a building, with or without appurtenant property; (2) at least two-thirds of the flats in the building must be let to qualifying tenants (leaseholders with a long lease — originally granted for more than 21 years); (3) no more than 25% of the internal floor area of the building (excluding common parts) may be used for non-residential purposes. The freeholder cannot resist the claim on the basis that management is satisfactory.
- Count the total number of flats and how many are held by qualifying tenants — if the two-thirds threshold is not met, RTM cannot proceed
- If the building contains commercial premises, calculate the floor area carefully — above 25% non-residential use disqualifies the building
- Check whether the building is self-contained — this is a factual question and can be complex for estates with shared structure
- A leasehold solicitor can carry out an eligibility audit to confirm qualification before you incur further costs
Serve the Claim Notice
The RTM company serves a claim notice on the freeholder (and any other landlord under an intermediate lease) under section 79 of the 2002 Act. The notice must be served on every person who is a landlord under a lease of the whole or any part of the premises, and on every manager appointed under Part II of the Landlord and Tenant Act 1987. The notice must contain the prescribed information including: the name and registered address of the RTM company, a statement that the RTM company is claiming the right to manage, the date on which the company proposes to acquire the right (at least 3 months after the notice), and a list of qualifying tenants.
- Serve the notice correctly — errors in the notice can invalidate the claim
- The acquisition date must be at least 3 months from the date of service of the notice
- Keep proof of service — it may be needed in any dispute
- Serve the notice on every landlord in the chain, not just the immediate freeholder
Counter-Notice From the Freeholder
The freeholder has 1 month from service of the claim notice to serve a counter-notice. The counter-notice must state either: (a) the freeholder does not consider that the RTM company is entitled to acquire the right to manage (and give reasons), or (b) the freeholder admits the claim. If no counter-notice is served, the RTM company acquires the right to manage on the proposed acquisition date without any further action.
- If the counter-notice admits the claim, prepare for the acquisition date — notify managing agents, insurers, service charge funds
- If the counter-notice disputes entitlement, you must apply to the First-tier Tribunal (Property Chamber) for a determination
- Freeholders sometimes serve counter-notices purely to delay the process — the Tribunal has powers to dismiss unmeritorious challenges
- Ask the Tribunal to award costs if the freeholder's resistance is unreasonable
Tribunal Application and Acquisition
If the freeholder disputes entitlement, the RTM company applies to the First-tier Tribunal (Property Chamber) for a determination. The Tribunal will decide whether the company is entitled to acquire the right. If the Tribunal finds in favour, or if the freeholder admitted the claim, the RTM company acquires management functions on the acquisition date. This includes the right to enforce leasehold covenants, carry out repairs, arrange building insurance, and collect service charges.
- Once the RTM company acquires management, it must carry out all management functions under the leases — this is a significant responsibility
- Arrange insurance, maintenance contracts, and service charge accounts before the acquisition date
- The freeholder retains some limited functions (e.g., enforcement of certain covenants and approval for certain leasehold transactions) — understand what transfers and what does not
- Consider appointing a managing agent on behalf of the RTM company if the leaseholders lack management expertise
Costs
Important Warnings
Taking on management through an RTM company means the leaseholders become responsible for all management decisions. Mismanagement can expose the RTM company and its directors to legal liability.
RTM does not give leaseholders the right to purchase the freehold — that requires collective enfranchisement under the Leasehold Reform, Housing and Urban Development Act 1993.
Service charge money held for the building must be protected and used only for the building's maintenance — do not mix it with general funds.
Useful Links
Frequently asked questions
- How long does the exercising your right to manage process take?
- The end-to-end timeline depends on which stage you're at. Common steps run on these timeframes: "Company formation: 1–2 weeks"; "Eligibility audit: 1–2 weeks"; "Claim notice served; acquisition date at least 3 months later"; "Counter-notice must be served within 1 month of the claim notice". Add court / counterparty response time on top — disputed matters can run months longer than the bare minimum.
- How much does it cost?
- Main outlays are: RTM company formation — £50–£300 (including legal fees for articles); Solicitor costs (straightforward RTM claim) — £2,000–£5,000; Tribunal application (if disputed) — £100–£200 Tribunal fee plus solicitor/barrister costs; Ongoing managing agent fees (post-acquisition) — Variable — typically 10–15% of service charge budget. Court fees often qualify for Help with Fees remission if you're on a low income. Solicitor fees are extra and vary widely — many matters can be done as a litigant in person.
- What are the most common mistakes to avoid?
- Watch out for: Taking on management through an RTM company means the leaseholders become responsible for all management decisions. Mismanagement can expose the RTM company and its directors to legal liability.; RTM does not give leaseholders the right to purchase the freehold — that requires collective enfranchisement under the Leasehold Reform, Housing and Urban Development Act 1993.; Service charge money held for the building must be protected and used only for the building's maintenance — do not mix it with general funds.. If you're unsure on any of these, get advice from a regulated solicitor or a free service like Citizens Advice before acting.
- Where can I find the official forms and guidance?
- The official sources are: GOV.UK: Right to Manage; Leasehold Advisory Service (LEASE); First-tier Tribunal (Property Chamber). Always use the forms / guidance from the issuing authority's own site — third-party copies can be out of date.
- Can I do this myself without a solicitor?
- Yes — many people complete this kind of matter as a litigant in person. The site walks through each step in plain English. A solicitor is recommended if: large sums are at stake, the other side has legal representation, the matter involves criminal liability, children, immigration, or you're unsure on any procedural deadline. Free advice is available from Citizens Advice, Law Centres, and (for some matters) LawWorks pro bono clinics.
Part of our Renters and Landlords hub
Housing law for tenants and landlords in England, with the Renters' Rights Act 2025 reform at the centre.