Right to Manage Costs: What Does an RTM Claim Actually Cost?

The Right to Manage (RTM) is free of the large premium you would pay in collective enfranchisement — there is no sum to pay the landlord for the management right. But "free" is not quite right either. Making an RTM claim involves company formation, potentially professional fees, and sometimes tribunal costs. This guide sets out exactly what you can expect to spend.

This applies to England and Wales. It is general guidance, not legal advice.

What there is no charge for

There is no premium or compensation payment to the landlord to exercise the Right to Manage. This is one of the key differences between RTM and collective enfranchisement (buying the freehold). The Commonhold and Leasehold Reform Act 2002 creates a "no-fault, no-payment" right: if your block qualifies and you follow the process, the management transfers to your RTM company and the landlord receives nothing for handing it over.

Since 3 March 2025, in an uncontested claim, the landlord also cannot recover its own professional costs from the RTM company or the participating leaseholders. Sections 87A and 87B of the 2002 Act (inserted by the Leasehold and Freehold Reform Act 2024) changed the default cost position — each party now bears its own costs unless a tribunal orders otherwise. This removed what had been a significant financial deterrent to RTM claims.

What you do have to pay for

Company formation

You must incorporate an RTM company before you can serve the claim notice. This is a private company limited by guarantee, formed under the model articles specified in the RTM Companies (Model Articles) (England) Regulations 2009.

Companies House charges:

• Online incorporation (digital or web): £100
• Same-day electronic incorporation: £156
• Paper incorporation: £124

In practice, most RTM companies are incorporated online for £100. Once incorporated, you must also file an annual confirmation statement (£50 digital / £110 paper — check current rates at Companies House).

The company continues to exist and file with Companies House for as long as the RTM company manages the block.

Professional advice for the claim

The RTM claim process involves statutory notices with precise requirements. Getting the notice wrong — wrong building description, wrong qualifying tenant list, wrong acquisition date — can defeat a claim and expose you to costs from a failed application.

Many groups use a solicitor or specialist RTM consultancy to:

• Draft and serve the Notice of Invitation to Participate
• Draft and serve the Claim Notice
• Handle any counter-notice from the landlord
• Manage the process to acquisition date

Professional fees for a straightforward uncontested RTM claim in a small-to-medium block (12-30 flats) typically range from £1,500 to £4,000 for the legal work, depending on complexity and who you use. Some specialist RTM services advertise fixed-fee packages at the lower end of this range.

This is optional — there is no legal requirement to use a solicitor. Leaseholders who are confident with the statutory process can proceed without professional help. The free advice service at the Leasehold Advisory Service (LEASE) provides guidance and template notices.

Tribunal fees (if the landlord disputes the claim)

If the landlord serves a counter-notice disputing your entitlement to RTM, the RTM company must apply to the First-tier Tribunal (Property Chamber) within two months. Tribunal application fees depend on the application type; for RTM applications they are set under the Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rules 2013. The application fee for a standard RTM determination application is around £100 (check the current fee schedule at the time of application).

You may also incur solicitor costs for the tribunal proceedings, but there is no loser-pays rule here. Section 87A(1) makes an RTM company and its members "not liable for any costs incurred by any other person in consequence of a claim notice", except as that section allows — and for the costs of proceedings, section 87A(5) defers to whatever power the tribunal has "under another enactment" rather than conferring one itself. In the First-tier Tribunal that power is rule 13 of those Rules, which allows a costs order only in limited cases, including where "a person has acted unreasonably in bringing, defending or conducting proceedings". So the tribunal has a discretion, but an award is not the default: if the claim succeeds, the landlord will normally bear their own costs.

What you pay if the landlord wins the dispute

If the tribunal finds in the landlord's favour (i.e., your building does not qualify for RTM, or there was a procedural defect), the RTM company will have its own solicitor costs to absorb, plus potentially the tribunal fee. If the company acted unreasonably in bringing or conducting the case, rule 13 of the Property Chamber Rules lets the tribunal order it to pay some of the landlord's costs of the proceedings. Section 87B is a separate and narrower power that does not reach proceedings costs at all: it applies to costs incurred before a claim notice is withdrawn or ceases to have effect, and expressly only where "the costs are incurred other than in connection with proceedings before a court or tribunal" — one of six conditions that must all be met, another being that the company acted unreasonably. In practice, costs orders against RTM claimants are uncommon when the claim was made in good faith.

What a typical RTM claim costs per flat

In a 12-flat block, the costs divide roughly as follows:

These are indicative figures. The professional fee varies most — a DIY claim would cost only the company formation fee.

Ongoing costs after RTM

Once you have RTM, your RTM company takes on the management functions. Ongoing annual costs include:

• Companies House confirmation statement (~£50/year digital)
• Annual accounts (if using an accountant — recommended even for small blocks)
• Any management software or tools the company uses (see our comparison of block management software options in the UK)
• Potential directors' and officers' (D&O) insurance — typically £150–400/year for a small block (and see how buildings insurance works under RTM)

These are ordinary running costs, not RTM-specific — you would pay similar amounts running any small limited company. For the full picture of what RTM directors take on, see our guide to RMC and RTM director responsibilities and how the Right to Manage process works.

Is RTM worth the cost?

RTM makes financial sense in most cases where:

• Your block currently pays for a managing agent through the service charge (replacing the agent with self-management or a cheaper agent directly saves money)
• There are specific management failures you want to address that the current landlord will not fix
• Leaseholders want more control over decisions about the building

The cost to acquire RTM (typically £200–500 per flat for a professionally-assisted claim) is usually recovered within one to two years if you replace an external managing agent with self-management (our managing agent fee calculator compares the annual agent cost against self-management for your block). Even if you appoint a new managing agent, choosing your own agent directly typically costs less than what a landlord-appointed agent charges through the service charge.

Sources

• Commonhold and Leasehold Reform Act 2002, s.87A — costs of RTM claims (inserted by LFRA 2024)
• RTM Companies (Model Articles) (England) Regulations 2009
• Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rules 2013
• GOV.UK — Filing a confirmation statement with Companies House
• LEASE — Right to Manage guidance
• First-tier Tribunal (Property Chamber)