Right to Manage: How RTM Works and How to Qualify

Right to Manage (RTM) is a statutory right that lets the leaseholders of a block of flats take over management of their building from the landlord or managing agent — without buying the freehold and without having to prove the current management is failing.

If you and your neighbours are frustrated with high service charges, poor maintenance, or an unresponsive agent, RTM is the most direct route to taking control. You form a company, serve the right notices in the right order, and on the acquisition date the management functions transfer to you. This guide covers who qualifies, how the claim works, what it costs, and the changes that came into force in 2025.

This applies to England and Wales. It is general guidance, not legal advice — see the disclaimer at the end.

What is the Right to Manage?

The Right to Manage was created by the Commonhold and Leasehold Reform Act 2002 (Part 2, Chapter 1). It is a "no-fault" right: you do not need to show the landlord has mismanaged the building. If your block qualifies and you follow the process correctly, the landlord cannot refuse.

Once acquired, RTM transfers the management functions under the leases to a Right to Manage company — repairs and maintenance of the structure and common parts, services, insurance, and the management of service charges. It does not transfer ownership of the freehold, ground rent, or the right to grant new leases. Those stay with the landlord. If you want to own the building outright, that is a separate process called collective enfranchisement.

The practical effect: your RTM company chooses the managing agent (or self-manages), sets the service charge budget, commissions the works, and runs the Section 20 consultation when major works are needed.

Who qualifies? The RTM criteria

Three sets of conditions have to be met — the building, the leaseholders, and the leases.

The building

• It must be a self-contained building, or a self-contained part of a building that is structurally detached or vertically divided.
• No more than 50% of the internal floor area can be in non-residential use (shops, offices). This limit was raised from 25% to 50% on 3 March 2025 — more mixed-use blocks now qualify (see the 2024 reforms below).
• The block must contain at least two flats.
• Buildings where the landlord is a local authority, or which fall under certain exemptions, cannot use RTM.

The leaseholders

• At least two-thirds of the flats must be let to "qualifying tenants" — leaseholders whose original lease was granted for more than 21 years.
• At the point you serve the claim notice, the RTM company's members must include qualifying tenants of at least half the flats in the building.

So in a 12-flat block, you need at least 6 members who are qualifying tenants to make the claim. The more neighbours you get on board, the smoother the process and the running of the company afterwards.

The leases

Most long residential leases (over 21 years) qualify. Shared-ownership leases where the leaseholder does not own 100% can be more complicated — check the specific lease terms.

How the RTM claim works, step by step

The process is a sequence of statutory notices with fixed minimum time periods. Miss a step or use the wrong notice and the claim can be challenged.

1. Form an RTM company. This is a private company limited by guarantee, with model articles prescribed by regulations. Every qualifying tenant in the building is entitled to become a member. The company name usually ends "RTM Company Limited". You register it at Companies House like any other company.

2. Invite all qualifying tenants to join. Before serving the claim, the company must give a Notice of Invitation to Participate to every qualifying tenant who is not already a member. This gives non-members the chance to join before the claim is made.

3. Serve the Claim Notice on the landlord. The claim notice sets out the building, the members, and the proposed acquisition date — which must be at least three months after the "counter-notice date" (below). It must be given to the landlord, any management company named in the leases, and any other party with management responsibilities.

4. Wait for the counter-notice. The landlord has at least one month from the claim notice to serve a counter-notice, either admitting the claim or disputing that the company is entitled to acquire RTM. The landlord can only dispute on the limited statutory grounds — not because they would rather keep managing the block.

5. Resolve any dispute. If the landlord disputes entitlement, the RTM company must apply to the First-tier Tribunal (Property Chamber) within two months for a determination. If the tribunal finds in your favour (or no counter-notice is served), the claim succeeds.

6. Acquire management on the acquisition date. On the date stated in the claim notice (or as adjusted after any dispute), the management functions transfer to the RTM company. The landlord must hand over funds held on account, including any uncommitted service charge and reserve fund money.

What RTM costs

There is no premium to pay the landlord — RTM is not a purchase. The costs are practical:

• Company formation — Companies House charges a small incorporation fee; budget for the registration and ongoing annual confirmation statement and accounts.
• Professional advice — many groups use a solicitor or a specialist RTM service to draft and serve the notices correctly. This is the largest discretionary cost and is optional if you are confident with the process.
• Tribunal fees — only if the landlord disputes the claim.

Since 3 March 2025, in an uncontested claim the landlord can no longer recover its own costs from the RTM company or the participating leaseholders. Previously, leaseholders often had to pay the landlord's professional costs of dealing with the claim. New sections 87A and 87B of the 2002 Act now make each party responsible for its own costs unless a tribunal orders otherwise. This change makes RTM materially cheaper to pursue.

What changed under the 2024 reforms

The Leasehold and Freehold Reform Act 2024 made several changes to RTM. Two of them came into force on 3 March 2025:

• The non-residential limit rose from 25% to 50%. Section 49 amended the qualifying threshold so that buildings with up to half their floor area in commercial use can now claim RTM. Many mixed-use blocks (flats above shops) that were previously excluded now qualify.
• Leaseholders no longer pay the landlord's costs in uncontested claims (sections 87A and 87B, described above).

Other parts of the 2024 Act — including the wider service-charge transparency reforms — are not yet in force. The government ran a consultation on strengthening leaseholder protections that closed in September 2025 and has said it intends to bring further provisions into force through secondary legislation. Until the relevant commencement orders are made, those reforms do not apply, and any guidance you read should treat them as upcoming rather than current.

After you acquire RTM: what you take on

Acquiring RTM means you take on the same legal obligations the landlord had:

• Setting an annual service charge budget and issuing compliant demands.
• Running Section 20 consultation before major works or long-term agreements.
• Producing year-end service charge accounts and keeping a reserve fund if the leases require one.
• Meeting Companies House obligations for the RTM company.

These are the same day-to-day duties every volunteer director faces. For the full picture of what running a block involves, see our guide to RMC and RTM director responsibilities and the common problems self-managed blocks face.

Quick checklist

• Confirm the building qualifies (self-contained, ≤50% non-residential, 2+ flats)
• Confirm two-thirds of flats are held by qualifying tenants (leases over 21 years)
• Recruit members — you need qualifying tenants of at least half the flats
• Form the RTM company at Companies House with the prescribed articles
• Serve the Notice of Invitation to Participate on non-member qualifying tenants
• Serve the Claim Notice with an acquisition date at least three months ahead
• Deal with any counter-notice; apply to the tribunal within two months if disputed
• Take over management — and the funds held on account — on the acquisition date

LevyBoard is building software to help volunteer directors run their block after acquiring RTM — service charge demands, deadline tracking, Section 20 workflows, and a full audit trail — so you can manage compliantly without a managing agent.

This guide covers the Right to Manage for residential leasehold flats in England and Wales. It is general information, not legal advice. The RTM claim process is technical and a single procedural error can defeat a claim — for a live claim, consider a solicitor or specialist RTM adviser, or the free advice service at the Leasehold Advisory Service (LEASE).

Sources

• Commonhold and Leasehold Reform Act 2002, Part 2 — Right to Manage
• Leasehold and Freehold Reform Act 2024, Section 49 — non-residential limit
• GOV.UK — Right to Manage: a guide for landlords
• LEASE — Right to Manage
• First-tier Tribunal (Property Chamber)