A practical guide to Right to Manage (RTM), eligibility, the legal process and what happens when leaseholders take over the management of their building.
If you own a leasehold flat and are unhappy with how your building is managed, you may feel that important decisions about maintenance, service charges and contractors are being made without enough input from the people who live there.
Even where there is no particular dispute, leaseholders may simply want greater control over how their development is run and how money collected through service charges is spent.
Right to Manage (RTM) gives qualifying leaseholders in England the opportunity to take over certain management responsibilities for their building without having to purchase the freehold.
Importantly, you do not normally need to prove that the freeholder or existing managing agent has done anything wrong. Right to Manage is a statutory process, and the key question is whether the building and participating leaseholders meet the relevant requirements.
For leaseholders in Hastings, Bexhill-on-Sea, Eastbourne and across East Sussex, understanding how RTM works is an important first step. But it is equally important to consider what happens after the process is complete, because taking control of a building also means taking responsibility for its management.
What is Right to Manage?
Right to Manage is a legal right that allows qualifying leaseholders of flats to collectively take over certain management functions from their landlord.
It was introduced under the Commonhold and Leasehold Reform Act 2002 and enables leaseholders to establish a Right to Manage company, usually called an RTM company.
Once the statutory process has been completed, the RTM company takes over the relevant management responsibilities for the building.
These can include:
- Repairs and maintenance
- Service charge budgeting and collection
- Buildings insurance arrangements
- Communal cleaning and gardening
- Contractor management
- Major works
- Health and safety and compliance matters
- Management of communal areas
- Certain approvals under the leases
The precise responsibilities depend on the legislation, leases and circumstances of the development.
The RTM company can manage the building itself, but it does not have to. Many RTM companies appoint a professional block management company to carry out the day-to-day work, with the directors retaining oversight.
Does Right to Manage mean buying the freehold?
No. Right to Manage and buying the freehold are different things.
Under RTM, the freeholder retains ownership of the freehold, but the RTM company takes over the relevant management functions.
Buying the freehold, sometimes called collective enfranchisement, involves qualifying leaseholders acquiring the freehold interest itself.
Right to Manage can therefore provide greater control over the running of a development without requiring leaseholders to purchase the building’s freehold.
Who qualifies for Right to Manage?
Not every residential building qualifies for RTM, and eligibility should be checked carefully before starting the process.
Generally, the main requirements include:
- The building must contain flats rather than being a house.
- At least two-thirds of the flats must be held by qualifying long leaseholders.
- At least half of the flats must be represented by members of the RTM company before the formal claim is made.
- The building must meet the relevant residential and non-residential floorspace requirements.
- The building must not fall within an applicable statutory exemption.
A qualifying long lease is generally one originally granted for a term exceeding 21 years. The important point is the original term of the lease, rather than simply how many years remain.
Can a building with shops or commercial premises qualify?
Potentially, yes.
Changes introduced in 2025 increased the permitted proportion of non-residential floorspace. A building may now qualify where up to 50% of the relevant floorspace is non-residential, subject to the other statutory requirements.
For example, a residential block with commercial premises at ground-floor level may be eligible, even where the commercial space would previously have prevented an RTM claim.
However, the way floorspace is calculated and the configuration of the building matter. Leaseholders should obtain appropriate advice rather than relying on a visual estimate.
Does every leaseholder have to agree?
No. Unanimous agreement is not required.
The statutory membership threshold generally requires qualifying leaseholders representing at least half the flats to become members of the RTM company.
For example, in a qualifying building containing 12 flats, leaseholders representing at least six flats would generally need to join the RTM company before it could make the formal claim.
That does not mean the other leaseholders stop having an interest in how the building is managed. The RTM company takes over the relevant management responsibilities for the qualifying building as a whole.
How does the Right to Manage process work?
Although the process follows a statutory framework, it involves more than simply collecting signatures and telling the freeholder that leaseholders want to take over.
The following seven steps explain the general process in England.
Step 1: Speak to the other leaseholders
The first practical step is usually to establish whether there is enough interest among the leaseholders to pursue Right to Manage.
Some residents may be unhappy with the current standard of maintenance or communication. Others may be more concerned about service charge expenditure or the lack of involvement in decisions affecting their building.
It is worth discussing what people hope to achieve and whether they understand the responsibilities involved.
Taking over management means the RTM company will need to make sure matters such as insurance, repairs, financial administration, contractors and compliance are properly managed.
A useful early conversation should therefore cover not only why leaseholders want greater control, but also how the building will be managed once that control has been obtained.
Step 2: Set up a Right to Manage company
Right to Manage must be exercised through a specially constituted RTM company.
This is a formal company with the required legal structure and articles of association. It is not simply an informal residents’ group or a committee formed by people living in the building.
The company must be properly incorporated, and directors will need to oversee its affairs.
Before setting it up, leaseholders should understand the relevant company administration requirements, how membership will work and what responsibilities directors will take on.
The company structure is important because the RTM company will become responsible for managing the building once the statutory process is complete.
Step 3: Invite other qualifying leaseholders to participate
Qualifying leaseholders who have not already joined the RTM company must be formally invited to become members.
This is done by serving a Notice Inviting Participation.
The notice must contain the information required by the legislation and follow the applicable procedural rules.
The invitation gives eligible leaseholders the opportunity to participate in the RTM company before the formal claim is made.
The required level of membership must be achieved before the company can proceed with the Notice of Claim.
Because these notices form part of a statutory process, errors can create complications. Professional legal advice is sensible when preparing and serving them.
Step 4: Serve the Notice of Claim
Once the RTM company has completed the necessary preliminary steps and achieved the required membership, it can formally notify the relevant parties that it intends to acquire the Right to Manage.
This is done by serving a Notice of Claim.
The notice identifies the building, provides details of the RTM company and participating qualifying leaseholders, and specifies important dates.
These include the deadline for a counter-notice and the proposed date on which the RTM company intends to take over management.
The Notice of Claim cannot generally be served until at least 14 days after the Notice Inviting Participation has been served.
The wording, content, timing and service of the notice are important. Leaseholders should seek appropriate professional advice to make sure the claim is prepared correctly.
Step 5: Allow the landlord to respond
After the Notice of Claim has been served, the landlord and other relevant parties have an opportunity to respond.
This is done through a counter-notice.
The deadline specified in the Notice of Claim must give at least one month for the response.
The landlord may accept that the RTM company is entitled to acquire the Right to Manage, or may dispute the claim on relevant statutory grounds.
If the claim is disputed, the RTM company may need to apply to the First-tier Tribunal (Property Chamber) for a decision. Strict time limits apply to challenging a counter-notice, so legal advice is particularly important if a dispute arises.
Where the claim is accepted or no valid objection prevents it from proceeding, preparations can continue towards the management handover.
Step 6: Prepare for the management handover
Successfully claiming Right to Manage is only part of the process. The RTM company also needs to be ready to manage the building from the acquisition date.
This is one of the most important practical stages.
Before the handover, the directors should consider how the following matters will be handled:
- Service charge budgeting and collection
- Bank accounts and financial administration
- Buildings insurance
- Cleaning and grounds maintenance
- Existing maintenance contracts
- Contractor arrangements
- Fire safety and other compliance responsibilities
- Planned repairs and major works
- Reserve and sinking funds
- Outstanding service charge matters
- Leaseholder and resident communication
- Company administration and director responsibilities
A building cannot simply stop being maintained while the RTM company organises itself. Insurance, essential services, urgent repairs and compliance arrangements all need to continue.
For that reason, it is often sensible to speak to a professional block managing agent well before the acquisition date.
The legal process is obviously important, but I think leaseholders also need to look carefully at what happens the day after they take over. Someone still needs to deal with the service charges, insurance, maintenance, contractors and all the other responsibilities that come with managing a building. Getting those arrangements in place before the handover can make a real difference to how smoothly everything runs.
Step 7: Take over management of the building
The date on which the RTM company formally acquires the relevant management functions is known as the acquisition date.
From that point, the RTM company becomes responsible for carrying out the management functions transferred under the legislation.
The outgoing landlord or manager may be required to provide relevant management information and transfer qualifying unspent service charge funds, including applicable reserve fund balances.
The RTM company will then need to ensure that the building continues to be properly managed.
The directors can oversee the work themselves or appoint a professional managing agent to undertake the day-to-day administration and management.
The important point is that Right to Manage changes who is responsible for the management functions. It does not remove the need for professional standards, appropriate financial controls or compliance with the relevant leases and legislation.
How long does Right to Manage take?
Right to Manage is not an immediate process.
The statutory timetable includes several minimum periods, and the overall timescale also depends on how quickly leaseholders organise themselves and whether the claim is disputed.
For an undisputed claim:
- The Notice of Claim can generally be served no earlier than 14 days after the Notice Inviting Participation.
- The landlord must be given at least one month to respond to the Notice of Claim.
- The proposed acquisition date must be at least three months after the deadline for the counter-notice.
This means that, even where everything progresses smoothly, the statutory notice periods alone take several months.
Additional time should be allowed for establishing the RTM company, obtaining information, preparing the notices and arranging the management handover.
If the claim is disputed and tribunal proceedings become necessary, the process can take longer.
Practical advice: Start thinking about the management arrangements early rather than waiting until the RTM company has completed the legal process.
Do you have to prove that your managing agent is doing a bad job?
No. This is one of the important features of Right to Manage.
Qualifying leaseholders can exercise RTM without proving that the freeholder or existing managing agent has mismanaged the building.
There may be concerns about maintenance, service charges or communication, but dissatisfaction is not a necessary legal condition of an RTM claim.
Some leaseholders pursue Right to Manage simply because they want a greater say in how their building is managed, which contractors are appointed and how long-term maintenance is planned.
This makes RTM different from certain other legal remedies, such as applying to a tribunal for the appointment of a manager, where different requirements apply.
What responsibilities do RTM company directors have?
Once the RTM company takes over management, its directors need to ensure that the relevant responsibilities are properly carried out.
These may include arranging maintenance, administering service charges, managing insurance, addressing compliance matters and ensuring that the company itself is properly run.
Directors also need to understand that decisions about the building can affect fellow leaseholders financially.
For example, keeping annual service charge contributions low may seem attractive, but it can create difficulties if the development is not making adequate provision for foreseeable major works.
Likewise, delaying necessary repairs can lead to more expensive problems later.
Directors do not need to personally carry out every task, but they should understand the responsibilities being undertaken on behalf of the RTM company and obtain appropriate professional advice where needed.
[INTERNAL LINK: Link to Oakfield’s article “What Is a Reserve Fund and Why Does Your Block Need One?”]
Can an RTM company appoint its own managing agent?
Yes. An RTM company can appoint a professional block management company to carry out the day-to-day management of the development.
In fact, this is often an attractive option for leaseholders who want greater control over the building without taking on every practical management task themselves.
The RTM directors can retain oversight of important decisions while the managing agent provides support with matters such as:
- Service charge budgets and financial administration
- Maintenance and contractor coordination
- Buildings insurance administration
- Compliance monitoring
- Communal cleaning and grounds maintenance
- Planned works and reserve fund planning
- Communication with leaseholders and residents
The RTM company remains responsible for its relevant management functions, so the directors should understand what the managing agent has been appointed to do and how performance will be monitored.
Right to Manage doesn’t have to mean that a group of leaseholders suddenly finds itself dealing with every maintenance call or contractor. The benefit is that the RTM company can have greater control over the decisions affecting the building while appointing an experienced managing agent to look after the day-to-day work. That can be a very practical arrangement, provided everyone understands their responsibilities.
What should an RTM company look for in a managing agent?
If leaseholders are considering Right to Manage, choosing a suitable managing agent should form part of the planning process.
An RTM company should look for experience of managing comparable developments, clear communication arrangements, transparent fees and a good understanding of service charge administration and compliance.
It is also worth asking how the agent would approach the handover from the existing management arrangements.
The incoming agent may need to review leases, service charge information, insurance documentation, contractor details, maintenance records and outstanding works before the acquisition date.
An organised handover can help avoid gaps in management and make the transition easier for both directors and residents.
Is Right to Manage always the best option?
Not necessarily.
Right to Manage can give qualifying leaseholders greater control, but it also creates ongoing responsibilities for the RTM company.
Before proceeding, leaseholders should consider whether there is sufficient support within the building, whether suitable directors are willing to take on the role and how the management functions will be carried out.
It is also worth considering the development’s current financial and maintenance position. An RTM company may inherit responsibility for managing a building with significant upcoming works, outstanding maintenance or difficult financial issues.
RTM can change who manages the building, but it does not make those underlying problems disappear.
For some leaseholders, pursuing Right to Manage may be the most appropriate route. Others may wish to explore alternative options, depending on who currently has the authority to appoint the managing agent and what they hope to achieve.
Obtaining independent legal advice can help leaseholders understand their options before committing to the statutory process.
Frequently asked questions about Right to Manage
Can leaseholders take over management without buying the freehold?
Yes. Right to Manage allows qualifying leaseholders to take over certain management functions without purchasing the freehold. The freeholder retains ownership, while the RTM company assumes the relevant management responsibilities.
Do all leaseholders have to agree to Right to Manage?
No. Unanimous agreement is not required. Generally, qualifying leaseholders representing at least half the flats must become members of the RTM company before the formal claim can proceed.
Can a building with shops qualify for Right to Manage?
Potentially. Under the revised eligibility rules, a building can qualify where up to 50% of its relevant floorspace is non-residential, provided the other statutory requirements are satisfied.
Does the freeholder have to agree to Right to Manage?
No. Right to Manage is a statutory right, so the freeholder’s agreement is not normally required where the building and leaseholders qualify and the correct process is followed.
How long does it take to complete Right to Manage?
The statutory process takes several months even where a claim is undisputed. Additional time may be needed to establish the company, prepare notices and arrange the management handover. Disputed claims can take longer.
Can an RTM company change the existing managing agent?
Yes. Once it acquires the relevant management functions, the RTM company can appoint its own managing agent, subject to the applicable legal and contractual arrangements.
Do RTM directors have to manage the building themselves?
No. Directors can appoint a professional managing agent to handle day-to-day matters, although the RTM company retains responsibility for the relevant management functions.
Does Right to Manage reduce service charges?
Not automatically. RTM gives leaseholders greater control over management decisions, but the building still needs to be maintained, insured and managed appropriately. The costs will depend on the development’s actual requirements.
Thinking about Right to Manage in East Sussex?
Right to Manage can give leaseholders a valuable opportunity to take greater control over how their building is run.
However, completing the legal process is only the beginning. The RTM company also needs to be ready to manage service charges, maintenance, insurance, compliance and the other responsibilities involved in looking after a residential development.
At Oakfield Estate Agents, we provide professional block and estate management for RMCs, RTM companies, freeholders and developers across East Sussex, including Hastings, Bexhill-on-Sea and Eastbourne.
Our Block Management team can discuss the practical management requirements of your development and how professional management could support an RTM company before and after the handover.
If you and your fellow leaseholders are considering Right to Manage, contact Oakfield to discuss your development and how we can help with the management arrangements.
This article provides general information about Right to Manage in England and should not be treated as legal advice. RTM involves specific eligibility requirements, statutory notices and legal procedures. Leaseholders should obtain appropriate professional or legal advice before proceeding.