Leasehold glossary

What is Right to Manage (RTM)?

Right to Manage (RTM) is a statutory right under the Commonhold and Leasehold Reform Act 2002 that lets qualifying leaseholders take over management of their building through an RTM company — without proving the landlord is at fault and without buying the freehold. The RTM company then controls repairs, services and the service charge.

RTM was created by the Commonhold and Leasehold Reform Act 2002 to give leaseholders a straightforward, no-fault route to running their own block. Before RTM, leaseholders unhappy with their landlord or managing agent had to either prove serious mismanagement to a tribunal or club together to buy the freehold outright. RTM removes both hurdles: if the building and the leaseholders qualify, management can pass to a leaseholder-controlled company regardless of whether anything has gone wrong.

What RTM transfers — and what it doesn't

When RTM is acquired, the management functions under the leases move to an RTM company: organising repairs and maintenance, arranging insurance and services, and — crucially — setting and collecting the service charge. The freeholder keeps ownership of the building and still receives any ground rent. RTM is therefore quite different from buying the freehold (collective enfranchisement): you gain control of management without owning the building.

Who qualifies

The right is only available where the building and the leaseholders meet set conditions:

  • The building must be self-contained and contain at least two flats.
  • Long leases — at least two-thirds of the flats must be held by qualifying tenants on long leases.
  • Non-residential limit — the non-residential part (shops, offices) must not exceed 50% of the internal floor area, raised from 25% by the Leasehold and Freehold Reform Act 2024 with effect from 3 March 2025.
  • Participation — at least half of the flats in the building must take part in the RTM company.
Good to know: RTM is a company-based right. The leaseholders form an RTM company (a special type of company limited by guarantee), which then serves a formal claim notice on the landlord. This is similar in structure to a Residents' Management Company (RMC), but an RMC is normally set up when the leases are granted, whereas an RTM company is created later to exercise the statutory right.

Why leaseholders use RTM

The most common driver is dissatisfaction with the service charge — high or opaque bills, poor value, or an unresponsive managing agent appointed by the freeholder. Once the RTM company is in control it can appoint its own managing agent, put contracts out to tender, and run the accounts transparently for the people who actually pay them. RTM does not, by itself, reduce charges — but it puts the decisions in leaseholders' hands.

RTM does not remove your other statutory protections. Even under a leaseholder-run RTM company, charges must still be reasonable, and any leaseholder can apply to the First-tier Tribunal under Section 27A of the Landlord and Tenant Act 1985 to challenge them.

How this shows up in your service charges

Whether your block is run by a freeholder's agent, an RMC or an RTM company, the same question applies: are the charges reasonable? Our free AI audit reads your service charge demand, accounts and lease and shows you, line by line, how much could be challengeable under the Landlord and Tenant Act 1985 — useful evidence whether you are considering RTM or already running the block yourselves.

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