Right to Manage Explained for UK Leaseholders

If you own a leasehold flat, you probably know the frustration. The freeholder or their managing agent decides who fixes the roof, who cleans the communal areas, and how much you pay for all of it. You get the bill. You rarely get the choice.

Right to Manage changes that. It is a legal right, created by the Commonhold and Leasehold Reform Act 2002, that lets leaseholders collectively take over the management of their building. No tribunal. No proving the freeholder has done anything wrong. No buying the freehold. You just qualify, follow the process, and the management transfers to you.

You do this through a special company called an RTM company, which you and your fellow leaseholders set up and run together. Once it is in place, that company takes on all the management responsibilities for the building, from maintenance contracts to service charge accounts.

Not every building can do this, so check these points carefully before you get excited.

The building must be at least two thirds residential. So a block that is mostly offices probably will not qualify. It also needs to contain at least two flats. A converted house split into two flats can qualify, which surprises a lot of people.

At least half of the total number of flats in the building must join the RTM company. This is the big one. If your block has twenty flats, you need at least ten leaseholders on board. Getting that many neighbours to agree and stay engaged is often the hardest part of the whole exercise.

You personally need to be a long leaseholder, meaning your original lease was granted for more than twenty one years. Most standard residential leases are for ninety nine years or one hundred and twenty five years, so you will almost certainly be fine there.

There are a few buildings that are excluded. If the freeholder lives in the building as their only or main home, you cannot use Right to Manage. Purpose built blocks where the freeholder occupies a flat are rare, but it does happen in converted houses.

Let's be honest about what this does and does not give you.

What it genuinely gives you is control over day to day management decisions. You choose the contractors. You decide the cleaning schedule. You set the service charge budget, within reason, and you can see exactly where every pound goes. For leaseholders who have been overcharged for shoddy work, or kept in the dark about building accounts, this is transformative.

You can appoint a managing agent of your own choosing, or manage the building yourselves if you have the time and skills. Either way, you are the client. The managing agent works for you, not for a distant freeholder with different priorities.

You also take on the right to collect service charges and to enforce the lease obligations of other leaseholders. That sounds dry, but it matters. It means you can actually get things done.

What it does not give you is ownership of the freehold. The freeholder still owns the land and the structure. They still receive ground rent if your lease requires it. They still have a say in certain major decisions, particularly anything that affects their reversionary interest in the property. Right to Manage is about management, not ownership.

The process is more structured than most people expect. There is a specific legal sequence and you need to follow it properly or the whole thing can be challenged.

1. Get your neighbours on board. Talk to at least half the leaseholders and make sure they are genuinely committed. People drop out, so aim for more than the minimum if you can.

2. Incorporate your RTM company. This is a specific type of company with a specific form of articles of association set out in regulations. You cannot just use a standard limited company. It must be a company limited by guarantee. Companies House registration costs a small fee and solicitors who specialise in leasehold work can set this up for you.

3. Invite all qualifying leaseholders to become members. Every leaseholder in the building, even those who did not help organise things, must be given the chance to join before you serve notice on the freeholder. This is a legal requirement, not a courtesy.

4. Serve a claim notice on the freeholder. This is a formal legal document. It must contain specific information including the name and registered number of the RTM company, details of the building, and a date for the management to transfer, which must be at least three months after the notice is served.

5. The freeholder can serve a counter notice. They have a set period to do this. If they dispute your right to manage, the matter goes to the First Tier Tribunal. If they do not serve a counter notice, or if they accept your claim, the management transfers on the date in your notice.

6. Prepare for handover. Before the transfer date, you need to have your managing arrangements in place, your bank account set up, and your contracts ready to take on.

Right to Manage sounds straightforward on paper. In practice, there are several things that catch people out.

The freeholder's legal costs. Here is one that genuinely stings. If your claim is successful, you are legally required to pay the freeholder's reasonable legal costs of dealing with your claim. You do not pay their costs if they dispute it and lose at tribunal, but for a straightforward uncontested claim, you will typically be paying their solicitor's bill. Get a sense of what that might be before you start.

Ongoing obligations are real and serious. Once you take on management, you are responsible for everything. Buildings insurance, maintenance, fire safety compliance, major works consultation, accounts, and more. If your RTM company fails to maintain the building properly, leaseholders can end up in a worse position than before. You need either willing volunteers with genuine skills or a good managing agent.

Leaseholders can be apathetic. Getting fifty percent to sign up is hard. Keeping them engaged once the excitement fades is harder. RTM companies sometimes struggle because the people who did the hard work burn out and nobody steps up to replace them.

The freeholder retains rights over certain things. They can still enforce lease covenants against leaseholders. They must be consulted on certain decisions. And if you want to make structural changes or extend leases, that still involves them directly.

You can lose the right. If the RTM company fails to carry out its obligations, the freeholder can apply to have management returned to them. This is not common but it does happen.

Nobody should go into this blind on costs. The amounts vary depending on your building and how complicated things get, but here are the categories to plan for.

Solicitor's fees for setting up the RTM company and drafting the claim notice are the main upfront cost. These vary considerably depending on the firm and the complexity of your building. Get quotes from solicitors who specialise in leasehold work specifically.

The freeholder's legal costs for an uncontested claim, as mentioned above, are your liability. Ask your solicitor for a realistic estimate based on your specific freeholder before you start.

If the freeholder disputes your claim and it goes to tribunal, costs can rise significantly, though you would not pay their costs in that scenario if you win.

Once you are running the RTM company, ongoing costs include managing agent fees if you appoint one, accountancy for the company, and any professional fees for major works consultation. These come out of the service charge, which you control, so they are not an additional burden on top of what you already pay. They replace what you were paying before, ideally more efficiently.

Honestly, it depends on your situation and your neighbours.

If you have a proactive group of leaseholders, a freeholder who has been difficult or expensive, and a building that genuinely needs better management, Right to Manage can be brilliant. It puts you in the driving seat and the savings on service charges can be meaningful over time, simply because you are choosing contractors on merit rather than whoever the freeholder prefers.

If your neighbours are disengaged, your building management is actually fine, or nobody in your block has the time to run a company properly, it can create more problems than it solves.

The sweet spot is a block of between six and twenty flats, where enough people care, the building has had genuine management problems, and at least one or two leaseholders have the organisational capacity to keep things running. In that scenario, Right to Manage is one of the most powerful tools available to leaseholders in England and Wales.

Scotland has different rules under its own property law, so if you are north of the border, the specifics here do not apply to you.