Right to Manage:
A Comprehensive Guide

A detailed guide on what you need to do to bring about real change with the management and your building, without having to buy the freehold.

​

A Right to Manage claim

The Right to Manage (RTM) is a legal process that empowers leaseholders to take control of the management of their building, including service charge budgets, choice of insurer and maintenance contracts. The advantage of this process is that it does not require the leaseholders to purchase the freehold in order to be involved in managing their building.

By forming a Right to Manage company, leaseholders can bypass landlords and manage their property independently, ensuring that their interests are prioritised. However, this process can be intricate and demands a solid understanding of legal requirements. It is something best undertaken with guidance from a leasehold solicitor, due to liability for landlords costs if things go wrong.

Here’s an in-depth guide to the RTM process, tailored for leaseholders seeking to undertake the management of their block of leasehold flats.

​

A right created for leaseholders

The Right to Manage was introduced under the Commonhold and Leasehold Reform Act 2002. It offers leaseholders a no-fault route to take over building management, removing the need to prove mismanagement by the landlord (unlike with Tribunal appointed manager claims). This process is open to leaseholders in buildings that meet specific criteria, such as being primarily residential and containing at least two flats.

​

Although the process is relatively straightforward in theory, it can be prolonged and contentious, especially if landlords raise technical objections - which is the only way to defeat these claims and is there fairly common. These objections are usually brought about by freeholders who do not wish to lose potential revenue streams related to management of the building. In some cases freeholders do not wish to spend money on maintenance because they also own a flat in the building, and simply collect rent without interest in the living conditions.

​

RTM is a powerful remedy to resolve this issue.

​

If disputes arise, they are resolved at the First-tier Tribunal (Property Chamber), which deals with property-related disputes. The key to a successful RTM claim is persistence—leaseholders should prepare to see the process through, regardless of potential obstacles.

​

Responsibilities After Securing the Right to Manage

Once an RTM company assumes control, it undertakes several key responsibilities:

• Repairs and Maintenance: Managing the building’s structural integrity and common areas.

• Service Provision: Ensuring amenities like lighting, heating, and cleaning are consistently delivered.

• Insurance: Arranging adequate building insurance as required by the lease covenants.

• Service Charge Collection: Collecting funds from leaseholders to cover maintenance and operational costs.

• Legal Compliance: Adhering to statutory requirements for managing the building such as Fire Risk Assessments and Asbestos Surveys

• Lease Approvals: Granting permissions for subletting, alterations, or other leaseholder requests.

• Enforcement of Covenants: Ensuring all leaseholders comply with their lease obligations.

​

Notably, the RTM company does not handle ground rent collection, non-residential parts of the property, or lease forfeiture. It’s often advisable for RTM companies to appoint professional property managers to handle day-to-day operations, as managing a building involves considerable legal and administrative expertise.

​

Steps in the Right to Manage Process

​

​

​

​

​

​

​

​

​

​

​

​

​

1. Incorporating the RTM Company

The first step is forming an RTM company, a special-purpose vehicle with a structure prescribed by law. All participating tenants become members of this company and may choose to act as directors, taking an active role in management.

2. Serving a Notice of Invitation to Participate

The RTM process mandates that all qualifying tenants be invited to join. This notice ensures inclusivity and gives every eligible leaseholder a chance to participate. It must be served at least two weeks before the main Notice of Claim.

3. Serving the Notice of Claim

At least 50% of the building's qualifying tenants must agree to the RTM claim. This notice informs the landlord of the tenants' intention to take over management and sets two critical dates: the landlord's response deadline and the proposed management takeover date.

4. Handling the Landlord’s Counter Notice

The landlord may respond in two ways:

• Agreeing to the RTM Claim: In this case, the management transfers smoothly on the takeover date.

• Disputing the Claim: The landlord must provide specific legal grounds for any objection. Disputes are resolved through the First-tier Tribunal.

​

5. Registering the Right to Manage

Once management rights are secured, the RTM company must register this change with the Land Registry. This step ensures third parties, such as potential buyers or service providers, are aware of the management structure.

​

Cost Considerations in a Right to Manage Claim

Legal and administrative costs vary depending on the complexity of the case. Typical costs include:

1. Legal Fees: RTM solicitors often charge hourly rates, and the total cost can range from £1,500 to £2,000 plus VAT for straightforward cases. Disputes requiring tribunal applications can significantly increase fees.

2. Landlord’s Costs: Leaseholders are responsible for covering the landlord’s reasonable costs related to the claim.

3. Land Registry Fees: Expect to pay around £50 for registration.

4. Miscellaneous Expenses: Copying lease documents, correspondence, and other administrative tasks may add minor additional costs.

​

Choosing the Right to Manage Solicitors

Engaging experienced right to manage solicitors is crucial to navigating this complex process successfully. Solicitors can help:

• Draft and serve notices.

• Handle disputes with landlords.

• Represent the RTM company in tribunal proceedings.

• Ensure compliance with legal requirements.

Additional Tips for a Smooth RTM Process

• Appoint a Liaison Officer: This individual acts as the point of contact between the RTM company and solicitors, streamlining communication and reducing costs.

• Hire a Managing Agent: A professional agent can handle day-to-day management, ensuring compliance and efficiency.

• Stay Committed: The RTM process requires determination, particularly if disputes arise.

The Leasehold and Freehold Reform Act 2024

The Act proposes changes to the RTM process, most notably to increase the part of the building that is allowed to be commercial i.e. a ground floor shop, to up to 50%.

This will mean that many more properties will qualify for the Right to Manage once these changes are formally enacted.

​

Conclusion

The Right to Manage empowers leaseholders to take control of their building's management, offering greater autonomy and ensuring better service delivery. Though it is not without its own problems and can be a headache if non-paying leaseholders or disruptive freeholders remain involved with the building. 

While the process can be lengthy and sometimes contentious, the benefits far outweigh the challenges. With the guidance of skilled right to manage solicitors and a clear understanding of responsibilities, leaseholders can achieve successful outcomes that improve their living environment and property value.

​

Have a look around our other guidance notes, as many leaseholder rights can be used alongside each other for maximum effect.