Right to Manage (RTM): How Leaseholders Take Control of Their Building

The Right to Manage (RTM) is a statutory right under Part 2, Chapter 1 of the Commonhold and Leasehold Reform Act 2002 (CLRA 2002) that allows qualifying flat leaseholders in England to take over the management of their building from the freeholder — without proving fault and without purchasing the freehold. It is exercised through a specially formed RTM company.

Does your building qualify?

• The building must be a self-contained building or a self-contained part of a building.
• It must contain at least two flats held by qualifying tenants (long leaseholders, originally granted for 21+ years).
• At least two-thirds of the total flats must be held by qualifying tenants.
• Not more than 25% of the internal floor area may be in non-residential use.
• The building must not be Crown Estate, Duchy of Cornwall, Duchy of Lancaster, or National Trust.

The 50% participation threshold

At least half of the total number of flats in the building must be owned by members of the RTM company when the claim notice is served. This includes flats owned by buy-to-let landlords — owner-occupation is not required. Flats owned by the freeholder count towards the total, making participation harder in new-build blocks where the developer retains unsold units.

Forming the RTM company

The RTM company must be incorporated at Companies House before the claim notice is served. It must be a private company limited by guarantee with articles of association complying with the RTM Companies (Memorandum and Articles of Association) (England) Regulations 2003. The company name must end in 'RTM Company Limited'. All qualifying tenants are entitled to become members, whether or not they supported the claim.

The claim notice process

1. Incorporate the RTM company at Companies House.
2. Recruit members — at least 50% of flats must be held by members before serving the claim notice.
3. Serve the statutory claim notice on the freeholder, managing agent, and any other relevant party. The notice must state the RTM company's details, the building address, confirmation of entitlement, a list of member qualifying tenants, and an acquisition date at least 4 months in the future.
4. The freeholder has one month to serve a counter-notice accepting or disputing the claim.
5. If a counter-notice disputes the claim, either party can apply to the FTT for determination.
6. On the acquisition date, the RTM company takes over all management responsibilities.

What changes after RTM

• The RTM company collects service charges from all leaseholders in the building.
• The RTM company takes on all management obligations under each lease, including Section 20 consultation for major works.
• The freeholder retains the freehold title and ground rent entitlement — RTM does not affect lease terms.
• The RTM company can appoint a professional managing agent to carry out day-to-day management.
• RTM can be terminated by court or tribunal order if the RTM company mismanages the building.