A six-storey white block of flats with stacked glass balconies and a glazed top floor

Right to Manage (RTM) for Leaseholders

Right to Manage lets qualifying leaseholders take over the management of their building without proving any fault by the landlord. We form the RTM company, serve the notices for a published fixed fee, then manage the building.

Check if your building qualifies Call 01752 257338

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Last updated 6 November 2026 by the Plymouth Block Management team.

Take control of your building with professional Right to Manage (RTM) support. Plymouth Block Management helps leaseholders in Plymouth, Devon, Bristol, Bournemouth and across the South West take over the management of their building through a compliant, structured process.

What Is Right to Manage?

In property, RTM stands for Right to Manage: a legal right in England and Wales that allows leaseholders of flats to take over the management of their building without needing to prove fault by the landlord.

It was introduced by the Commonhold and Leasehold Reform Act 2002. The leaseholders set up an RTM company, a private company limited by guarantee whose members are the participating leaseholders. Once the right is acquired, that company takes over the landlord’s management functions under the leases, such as repairs, services, insurance and service charges, while the freehold stays with the landlord.

With Right to Manage, leaseholders can:

Choose their own managing agent
Control service charges and budgets
Improve maintenance and standards
Gain full transparency over finances

Leeward House at Mount Wise, Plymouth: a six-storey white apartment block with stacked glass balconies, seen from above its car park — Leeward House, Plymouth, one of the Right to Manage buildings we work with

What Is an RTM Company and What Does It Do?

An RTM company is a private company limited by guarantee that the qualifying leaseholders of a building set up under the Commonhold and Leasehold Reform Act 2002 to claim, and then exercise, the right to manage. It is registered at Companies House, its members are the participating leaseholders, and the directors they appoint run it. Once the right is acquired, the company takes over the landlord’s management functions, not the ownership of the building.

A right to manage company has no shares. Its articles of association must follow the form prescribed by the RTM Companies (Model Articles) (England) Regulations 2009, which limit each member’s liability to £1, and they name the premises the company is formed to manage. From the acquisition date, the landlord is also entitled to become a member. Forming the company is the first stage of our Right to Manage service. An RTM company is not the same as a residents’ management company, which is usually set up by the developer and named in the leases; our page on residents’ management companies explains the difference.

RTM Company Directors' Responsibilities

RTM company directors are responsible for running the company properly and, from the acquisition date, for making sure the landlord’s management functions under the leases are carried out. They are usually leaseholders in the building, and the duties apply whether or not the company appoints a managing agent.

Under the Companies Act 2006, directors must act within the company’s constitution, promote its success for the benefit of its members, exercise independent judgement and reasonable care, skill and diligence, and avoid or declare conflicts of interest. The company must file a confirmation statement and annual accounts at Companies House and keep its register of members up to date, and each director is required to verify their identity with Companies House.

The management duties follow the leases and the statutes that apply to a landlord: service charges limited to costs reasonably incurred under section 19 of the Landlord and Tenant Act 1985, consultation under section 20 before qualifying works that would cost any leaseholder more than £250, service charge money held on trust under section 42 of the Landlord and Tenant Act 1987, buildings insurance where the leases provide for it, and the fire safety duties for the common parts.

A managing agent can carry out that work, but the company stays responsible and the agent is accountable to its board. Our guides on the Companies Act duties of directors and on appointing and removing directors go into more detail.

How the Right to Manage Process Works

The Right to Manage process follows a defined legal structure:

Confirm eligibility of the building
Form a Right to Manage (RTM) company
Serve a Notice Inviting Participation
Serve a Claim Notice on the freeholder
Receive the landlord’s Counter Notice
Take over management on the acquisition date

Although the process is considered straightforward, legal criteria must be followed carefully to avoid delays or disputes. Our guide to common RTM company pitfalls covers the mistakes to avoid. Each notice, the landlord's counter-notice and the acquisition date are set out step by step in our guide to the RTM claim process.

What Are the Benefits and Responsibilities of Acquiring the Right to Manage?

Acquiring the Right to Manage gives those leaseholders who participate the right to take over the management of the building.

The benefits of acquiring the Right to Manage are:

Through the RTM company, the leaseholders set the service charge budget, manage the service charge and any reserve fund, and keep proper accounts of both
The leaseholders acquire the right to appoint or dismiss the Managing Agent
The leaseholders acquire the right to appoint and dismiss contractors who provide services to the building such as builders and gardeners
The leaseholders acquire the right to choose the building insurance policy through a suitable third-party insurance broker

Acquiring the Right to Manage also places responsibilities on the RTM company and, through it, on the leaseholders:

The RTM company is responsible for the proper maintenance and upkeep of the building and associated grounds, if any
The RTM company is responsible for ensuring the building is correctly and sufficiently insured and must provide a copy of the insurance policy to the freeholder
The RTM company is responsible for ensuring all fire, health and safety requirements both under the lease and under the current legislation are met and enforced

A bright communal landing at Brunel Mews, Saltash, with a white balustrade, blue carpet, a window and a ceiling light — A communal landing at Brunel Mews, Saltash, a building we manage

What Right to Manage Does Not Do

RTM transfers management, not ownership. The freeholder keeps the freehold and any ground rent, and RTM does not extend leases or reduce ground rent; those need a lease extension or a freehold purchase. The RTM company must give the landlord notice before granting certain approvals under the leases, and its directors carry company law duties for as long as they serve.

Do You Qualify for Right to Manage?

To qualify for Right to Manage in England:

The building must contain at least two flats held by qualifying tenants, and qualifying tenants must hold at least two-thirds of all the flats
Qualifying tenants of at least half of the flats must join the RTM company (both, where there are only two flats)
The building must be self-contained (a self-contained part of a building can also qualify)
No more than 50% of the internal floor area can be non-residential (raised from 25% on 3 March 2025)
A long lease generally means one granted for more than 21 years

Some buildings are excluded under Schedule 6 to the Act: a building that is not a purpose-built block, contains no more than four units and has a resident landlord; a building where a local housing authority is the immediate landlord of any qualifying tenant; and a building already managed by another RTM company. We can assess your building and confirm whether it qualifies.

Can the Freeholder Object to RTM?

It can object, but only on legal grounds. A freeholder cannot block a valid claim because it would rather keep control; it can only dispute the claim by serving a counter-notice.

A counter-notice can only argue that the RTM company is not entitled to acquire the right, for example because:

The building does not qualify or falls within an exclusion
The RTM company is not compliant
Participation requirements are not met

If the freeholder disputes the claim, the RTM company can apply to the First-tier Tribunal (Property Chamber), which decides whether it is entitled to acquire the right.

Our Right to Manage Services

Plymouth Block Management provides a complete RTM solution:

RTM Company Formation

We set up your Right to Manage company correctly.

Legal Notice Management

Preparation and service of all required legal notices.

Full Transition Support

We manage the handover from landlord to leaseholders. The outgoing landlord or manager must pay the accrued uncommitted service charges over to the RTM company on the acquisition date, or as soon as reasonably practicable after it, under section 94 of the Commonhold and Leasehold Reform Act 2002. Under section 93 the company can also require the information and documents it reasonably needs, to be provided within 28 days of its notice, though nothing has to be handed over before the acquisition date. The directors of Leeward House RTM describe their own changeover in their client testimonial.

Managing Agent for RTM Companies

From the acquisition date we can act as the RTM company’s managing agent, answering to its directors. The board approves the service charge budget we prepare; we then send the demands, each with the statutory summary of rights, chase any arrears, run Section 20 consultations, place the buildings insurance through a broker and keep the fire risk assessment and compliance records up to date, with a 24-hour emergency line for leaseholders. We can also act as company secretary and keep the company’s Companies House filings on time. The building’s money sits in its own designated client account with Lloyds Bank Plc, our fee is a fixed annual amount the board agrees in advance, and we take no commission on contractor work or insurance.

The RTM company keeps control of the appointment and can change agent on the notice its management agreement sets out.

What Right to Manage Costs

Forming the RTM company and making the claim are fixed fees, published in advance and including VAT: £275 for the company formation and £1,440 for the claim pack, plus £210 for a counter-claim notice if one is needed. Once the right is acquired, management is a separate fixed annual fee quoted for the building.

Since 3 March 2025 an RTM company and its members are no longer liable for the landlord's costs simply because a claim notice was given. Costs can still be ordered in narrow cases, such as a failed claim pursued unreasonably.

Right to Manage fees
Service	Fee
RTM company formation	£275.00
RTM claim pack	£1,440.00
RTM counter-claim notice	£210.00
RMC or RTM membership application	£150.00

Taken from our published Additional Services price list, PBM Form #01-27 rev.6, effective 23 June 2025. All fees quoted are inclusive of VAT.

How Does RTM Insurance Work?

When an RTM company acquires the right to manage, the landlord's insurance function passes to it under section 96 of the Commonhold and Leasehold Reform Act 2002. Where the leases make the landlord insure the building, the RTM company must have a buildings policy in place from the acquisition date and give the landlord a copy.

From that date the company's obligations under the leases are owed to the landlord as well as to the leaseholders (section 97(1)), and the landlord is not entitled to insure under the leases unless the RTM company agrees (section 97(2)), although section 97(3) still allows anyone to insure the building at their own expense. The premium is recovered through the service charge in the way the leases provide. Leaseholders who have not joined the RTM company are covered by the same policy and pay their share in the same way, because the company takes over the insurance function under every lease in the building, not only its members' leases.

The model articles that every RTM company in England must follow expressly allow it to insure:

The building, up to the full cost of rebuilding and reinstating it, including professional fees
The company and its directors and officers against public liability and other risks the company considers prudent

In practice that means buildings insurance where the leases require it, liability cover for the company, and directors' and officers' cover for the board. We arrange buildings insurance through a broker, and the broker, not us, advises on the policy. A reinstatement cost assessment keeps the sum insured in line with what a rebuild would actually cost.

Right to Manage: Pros and Cons

Leaseholders usually turn to Right to Manage because of rising or unclear service charges, poor communication from the managing agent, delayed repairs or a lack of transparency.

The pros of Right to Manage:

No fault by the landlord has to be proved
The leaseholders choose the managing agent, the contractors and the insurance
The RTM company sets the service charge budget and manages any reserve fund
Since 3 March 2025, an RTM company is no longer liable for the landlord's costs just because it gave a claim notice

The cons of Right to Manage:

The directors take on the landlord's management duties and the company's own filings
The qualifying tenants of at least half the flats have to join the company before the claim
Ownership, the ground rent and the lease terms stay exactly as they were
Certain approvals under the leases need notice to the landlord before they are granted

Right to Manage FAQs

What Is an RTM Company?

A company limited by guarantee that qualifying leaseholders form under the Commonhold and Leasehold Reform Act 2002 to take over the management of their building. The participating leaseholders are its members, it is registered at Companies House, and its directors make the decisions. It acquires the right to manage, not the freehold, which stays with the landlord.

How Much Does Right to Manage Cost?

Our published fixed fees, including VAT, are £275 to form the RTM company and £1,440 for the claim pack, with £210 for a counter-claim notice where one is needed. Management after the right is acquired is a separate fixed annual fee quoted for the building.

How Long Does Right to Manage Take?

Typically four to six months if the claim is not disputed. The claim notice must give the landlord at least one month to serve a counter-notice, and the acquisition date must be at least three months after that deadline. A disputed claim takes longer because the tribunal must decide it first. The claim notice cannot be given until at least 14 days after the notice inviting participation has been given to each qualifying leaseholder who is not yet a member.

Can a Landlord Refuse RTM?

Not simply because it would rather keep control. The landlord can serve a counter-notice disputing the claim, for example if the building does not qualify, falls within an exclusion or the notices were defective, and the First-tier Tribunal then decides whether the RTM company is entitled to acquire the right.

Do All Leaseholders Need to Agree?

No. Qualifying tenants of at least half the flats must be members of the RTM company, and where the building has only two flats, both must join. Leaseholders who do not join keep their leases and can become members later.

Is Right to Manage Worth It?

It depends on the building. RTM gives leaseholders control over the managing agent, contractors and budget, but the RTM company’s directors take on the landlord’s management duties, so it needs leaseholders willing to act as directors. If the real problem is the current agent rather than the landlord, changing managing agent may be enough; our guide to when Right to Manage makes sense compares the two. We can talk through whether it suits your block.

Can an RTM Company Buy the Freehold?

Not as an RTM company. Its prescribed articles give it one object, to acquire and exercise the right to manage the premises, and under section 73(5) of the Commonhold and Leasehold Reform Act 2002 a company stops being an RTM company if the freehold is transferred to it. Leaseholders who want to own the building usually form a separate company to buy the freehold through collective enfranchisement; our lease extension and freehold purchase support page explains where we fit.

Does an RTM Company Director Have to Be a Leaseholder?

No. Under the model articles, any person who is willing to act and is permitted by law to do so can be appointed, by ordinary resolution of the members or by a decision of the directors. Directors are usually leaseholders, but a relative or a professional can serve. A director must be at least 16 under section 157 of the Companies Act 2006.

When Can Leaseholders Set Up an RTM Company?

Whenever the building qualifies and enough leaseholders want to go ahead; no fault by the landlord has to be shown. Once the company is formed, each qualifying tenant who has not joined must be given a notice inviting participation at least 14 days before the claim notice, and when the claim is made qualifying tenants of at least half the flats must be members (both, where there are only two qualifying tenants).

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