Right to Manage explained: how leaseholders can take control of their block.
What is Right to Manage?
RTM allows qualifying leaseholders to take over the management of their building by setting up an RTM company, without having to prove the freeholder or existing managing agent has done anything wrong, and without needing the freeholder's consent.
Who's eligible?
The building must contain at least two flats held by qualifying leaseholders
At least two-thirds of the flats in the building must be let to qualifying long leaseholders
At least half of the qualifying leaseholders must participate in the claim
Recent reform has raised the permitted level of non-residential (commercial) floor space in a building from 25% to 50%, bringing more mixed-use buildings into scope
The process, step by step
An RTM company is formed and serves a formal 'claim notice' on the freeholder, setting out the intention to take over management. The freeholder then has a set period to respond - either accepting the claim or, in limited circumstances, challenging it at tribunal. If uncontested, management formally transfers to the RTM company on the agreed date.
What about costs?
Under recent reform, leaseholders are generally no longer liable for the freeholder's legal and professional costs of a standard, uncontested RTM claim - a significant change from the previous position, where these costs could make leaseholders think twice before pursuing a claim.
What happens after RTM?
Taking on Right to Manage doesn't mean leaseholders have to run the building's day-to-day operations themselves - most RTM companies appoint a professional managing agent to handle compliance, maintenance, budgeting and service charge administration on their behalf, while the leaseholders retain control and oversight through the RTM company.
Frequently asked questions
Do all leaseholders have to agree to an RTM claim?
No - at least half of the qualifying leaseholders need to participate, not every leaseholder in the building. Others can join later if they choose to.
Does Right to Manage change my lease?
No, RTM changes who manages the building, not the terms of individual leases. Leaseholders' rights and obligations under their leases remain the same.
Can a managing agent be appointed after an RTM claim succeeds?
Yes - this is very common. The RTM company retains legal control and decision-making, while a managing agent like Fortem handles the day-to-day running of the building.
Considering Right to Manage, or already gone through the process and looking for a managing agent? Get in touch at hello@fortemproperty.co.uk or 020 3725 6755.