How Right to Manage Works: A Step-by-Step Guide for UK Flat Owners

The RTM claim process, step by step

Right to Manage (RTM) is a statutory right introduced by the Commonhold and Leasehold Reform Act 2002 that allows qualifying leaseholders in a block of flats to take over the management of their building from the freeholder - without having to prove mismanagement and without paying compensation to the freeholder.

RTM does not transfer ownership of the freehold. The freeholder retains ownership of the building and the land. What changes is who is responsible for arranging and overseeing the management services: maintenance, insurance, service charge collection, contractor relationships, and so on.

This matters enormously in practice. If your current managing agent is unresponsive, if service charges feel opaque, or if the building simply isn't being maintained to a reasonable standard, RTM gives leaseholders the legal mechanism to take control.

New to RTM and still deciding whether it's right for your block? Start with our complete guide to Right to Manage for the what, why and eligibility basics, then come back here for the claim mechanics.

Who qualifies for Right to Manage?

To exercise RTM, the building and the participating leaseholders must meet certain criteria:

The building must:

• Contain at least two flats held by qualifying tenants
• Have at least two-thirds of the flats held by qualifying tenants (leaseholders with a long lease, typically over 21 years remaining)
• Be used primarily as residential premises - if more than 25% of the internal floor area (excluding common parts) is used for non-residential purposes, RTM is not available
• Not be part of a wider building where a resident landlord lives (there are specific exemptions for small buildings where the freeholder also occupies a flat)

The participating leaseholders must:

• Represent at least 50% of the flats in the building (so in a 20-flat block, at least 10 leaseholders must join the RTM company)
• Each hold a long lease (originally granted for more than 21 years)

Note: you do not need the freeholder's permission, and the freeholder cannot refuse RTM if the qualifying criteria are met. They can, however, dispute the claim - in which case you may need to apply to the First-tier Tribunal (Property Chamber) to have it determined.

Step 1: Form an RTM company

Before serving any notices, you must incorporate a Right to Manage company - a private company limited by guarantee, governed by prescribed Articles of Association set out in the RTM Companies (Memorandum and Articles of Association) (England) Regulations 2003.

The company must be incorporated specifically for RTM purposes and its name must include the words "RTM Company Ltd" (though the exact format varies). Membership is open to qualifying leaseholders - all of whom are entitled to become members - and the freeholder also becomes a member once the claim succeeds.

Incorporation costs around £20-50 via Companies House and can be done online. Many solicitors who specialise in leasehold matters offer fixed-fee RTM packages that include company formation, notice preparation, and managing the claim through to completion.

Step 2: Invite all qualifying leaseholders

The RTM company must give a Notice of Invitation to Participate to every qualifying leaseholder who is not already a member of the RTM company. This notice must be given at least 14 days before the Claim Notice is served on the freeholder.

This step is often overlooked or rushed, but it's important: if you fail to give notice to all qualifying leaseholders, the claim can be invalidated. Keep a record of all notices served and when.

Step 3: Serve the Claim Notice on the freeholder

The RTM company then serves a Claim Notice on the freeholder (and any other relevant parties, such as a head lessee). The Claim Notice must:

• Be in prescribed form
• Specify the full address and description of the premises
• State the proposed acquisition date - at least three months after the claim notice date
• List all members of the RTM company at the date of the notice
• Include a statement that the RTM company is entitled to exercise the right to manage and inviting the freeholder to respond within one month

The freeholder has one month to serve a Counter-Notice disputing the claim. If they do not respond, or if they acknowledge the claim, the RTM company acquires the right to manage on the acquisition date.

Step 4: Manage the transition

Once RTM is acquired, the new RTM company takes over the management functions from the freeholder or their managing agent. In practice, this means:

• Taking over existing maintenance and service contracts (or tendering for new ones)
• Setting up a service charge collection process and holding funds in a designated trust account
• Arranging buildings insurance and ensuring it meets the lease requirements
• Establishing a process for handling leaseholder repairs requests and maintenance issues
• Holding an Annual General Meeting and filing accounts with Companies House each year

Many RTM companies choose to appoint a professional managing agent to carry out the day-to-day management - but now on terms and at a price the RTM company controls, rather than one imposed by the freeholder.

What RTM gives you - and what it doesn't

RTM gives you:

• Control over who manages the building and on what terms
• The ability to select contractors through competitive tender
• Direct oversight of service charge expenditure
• The power to make decisions about maintenance, major works, and reserve fund levels
• A formal structure (the RTM company) for making collective decisions

RTM does not give you:

• Ownership of the freehold - the freeholder still owns the building and land
• The right to grant lease extensions (though leaseholders can still exercise their individual right to a statutory lease extension)
• Immunity from ground rent demands or other obligations under individual leases (until the Leasehold Reform (Ground Rent) Act 2022 came into force for new leases)
• Automatic exemption from the freeholder's management fees for their own flat, if they have one

RTM vs. buying the freehold (collective enfranchisement)

RTM and collective enfranchisement (buying the freehold together) are often compared. Here's how they differ:

• Cost - RTM is significantly cheaper. Collective enfranchisement requires valuing and paying for the freehold, plus legal costs on both sides. RTM has legal costs but no purchase price.
• Participation threshold - RTM requires 50% of qualifying leaseholders. Collective enfranchisement also requires 50%, but has different qualifying criteria.
• Outcome - Enfranchisement gives full ownership and the ability to grant new leases. RTM gives only management control.
• Complexity - Enfranchisement is significantly more complex and expensive to execute. RTM is more straightforward.

For many blocks, RTM is the right first step: it improves management quality and transparency immediately, and leaves the door open for collective enfranchisement later if the leaseholders decide to pursue it.

Common pitfalls to avoid

• Incorrect Articles of Association - using non-prescribed Articles will invalidate the company for RTM purposes
• Missing the invitation notice - failure to notify all qualifying leaseholders is a common ground for the freeholder to dispute the claim
• Insufficient membership - check you have 50% before serving the Claim Notice; joining after the notice is served doesn't count
• No transition plan - acquiring RTM without a clear plan for management handover can create a difficult few months for the building
• Underestimating ongoing obligations - the RTM company has statutory duties including annual accounts, Companies House filings, and service charge accounting to RICS standards

Getting help

The Leasehold Advisory Service (LEASE) provides free, impartial guidance on RTM. Most specialist leasehold solicitors offer fixed-fee RTM services and can manage the process from company formation to acquisition. Expect legal fees of £2,000-£5,000 for a straightforward claim, depending on complexity and the number of participating flats.

References and further reading

• Leasehold Reform, Housing and Urban Development Act 1993 - establishes the Right to Manage and collective enfranchisement rights
• Commonhold and Leasehold Reform Act 2002 - strengthened RTM rights and simplified the process
• LEASE - Right to Manage guide - free, comprehensive guidance from the Leasehold Advisory Service
• First-tier Tribunal (Property Chamber) - handles disputed RTM claims and related applications
• Companies House - for incorporating and filing returns for your RTM company

RTM is one of the most powerful tools available to UK leaseholders. Used correctly, it transforms the relationship between residents and their building's management - giving directors the control they need to run their block with confidence.

Once you've acquired the Right to Manage, the next step is getting organised. Marklet is block management software built for RTM companies - helping directors track issues, monitor service charges, and keep a complete record of every communication with their managing agent from day one.