England and Wales | Right to Manage
Right to Manage: How Flat Owners Take Over Management
The right to manage lets leaseholders of flats take over the management of their building from the landlord through an RTM company, "without having to prove bad management", in GOV.UK's words. It is set out in Part 2 Chapter 1 of the Commonhold and Leasehold Reform Act 2002, changed from 3 March 2025 by the Leasehold and Freehold Reform Act 2024.
The short answer
- The building must be self-contained, have at least two flats held by qualifying tenants (long leaseholders), and those must be at least two-thirds of the flats.
- Non-residential parts can be up to 50% of the internal floor area since 3 March 2025 (25% before).
- A converted building with a resident landlord and 4 units or fewer is exempt.
- On the claim date, members must include qualifying tenants of at least half the flats; with only two qualifying tenants, both.
- Since 3 March 2025, an RTM company and its members are in most cases not liable for the landlord's costs of the claim.
Which buildings qualify
- A self-contained building, or a self-contained part that is a vertical division with its own services (s 72).
- At least two flats held by qualifying tenants, who hold at least two-thirds of all the flats. A qualifying tenant holds a long lease, mainly one granted for more than 21 years.
- Non-residential parts no more than 50% of the internal floor area, not counting common parts (Schedule 6, from 3 March 2025).
- Not where a local housing authority is the landlord of any qualifying tenant, or within 4 years after an earlier RTM company's right ended.
- Not a converted building with a resident landlord that contains no more than four units. The resident landlord must own the freehold of a flat in the building and have lived there as their main home for the last 12 months. This exemption never applies to a purpose-built block.
What the numbers mean for 2 to 6 flats
Our own arithmetic from s 72(1) (at least two-thirds) and s 79(4) and (5) (half the flats, or both where there are two), assuming every unit is a flat.
| Flats | Qualifying tenants needed | Members needed on the claim date |
|---|---|---|
| 2 | 2 | 2 (both) |
| 3 | 2 | 2 |
| 4 | 3 | 2 |
| 5 | 4 | 3 |
| 6 | 4 | 3 |
The RTM company
- A private company limited by guarantee whose object is to acquire and exercise the right to manage. Its name ends "RTM Company Limited". Only one can exist for the same premises.
- The government's model articles apply whether or not the company adopts them. Each member agrees to pay up to £1 if the company is wound up.
- Each flat has one vote when no landlord is a member. Since 3 March 2025, landlord members' votes are capped at one third of the qualifying tenants' votes.
- General meeting quorum: 20% of voting members or two members, whichever is greater. Directors' meetings: never fewer than two.
- Directors are unpaid unless a general meeting agrees an amount. Any member may inspect and copy the company's books and records.
The claim, step by step
- Give every qualifying tenant who is not a member a notice of invitation to participate, with where and when the articles can be inspected (s 78).
- Wait at least 14 days, then check membership: qualifying tenants of at least half the flats, or both if there are only two (s 79).
- Give the claim notice to each landlord and any other party to the leases, with a copy to every qualifying tenant. It sets a counter-notice deadline at least one month later and an acquisition date at least three months after that (s 80).
- The landlord may admit or deny the claim by counter-notice. If denied, the RTM company has two months to apply to the tribunal, or the claim is treated as withdrawn (s 84).
- On the acquisition date the RTM company takes over services, repairs, maintenance, improvements, insurance and management. The old manager must hand over uncommitted service charge money (s 94).
- In England the tribunal fee for an RTM application is £200, plus £300 for a hearing.
After you take over
- Service charge law applies to the RTM company as if it were the landlord.
- The RTM company gives the landlord 30 days' notice before approving an assignment, subletting, alterations or a change of use, and 14 days for anything else.
- It must report a breach of a lease to the landlord within 3 months of learning of it. It can never forfeit a lease.
- If the landlord keeps flats that are not let to qualifying tenants, the landlord pays the RTM company its share of costs.
- The right ends by agreement with every landlord, on the company's insolvency or strike-off, or when a tribunal-appointed manager starts.
England and Wales only. Scotland and Northern Ireland have their own law: GOV.UK says RTM companies and commonhold associations do not exist there. Law text read on legislation.gov.uk and guidance on GOV.UK on 31 October 2026.
Common questions
What is the right to manage? +
A legal right for leaseholders of flats to take over the landlord's management of their building through an RTM company, without proving bad management (Commonhold and Leasehold Reform Act 2002, Part 2 Chapter 1).
What is an RTM company? +
A private company limited by guarantee, owned by the qualifying tenants, whose object is to acquire and exercise the right to manage. Its name ends "RTM Company Limited".
How do I set up a right to manage company? +
Register a company limited by guarantee with Companies House using the RTM model articles (£100 online). Then invite the other qualifying tenants to join, wait at least 14 days, and give the claim notice once members include qualifying tenants of at least half the flats.
Can a building of 2 flats use right to manage? +
Yes, if both flats are held by qualifying tenants and both join the RTM company, unless it is a converted building with a resident landlord, which is exempt at 4 units or fewer.
What is the resident landlord exemption? +
Right to manage does not apply to a building that is not purpose-built, has no more than four units, and has a resident landlord who owns the freehold of a flat there and has lived in it as their main home for the last 12 months.
How long does a right to manage claim take? +
The counter-notice deadline is at least one month after the claim notice, and the acquisition date at least three months after that deadline, so at least four months when the landlord does not dispute it.
Do we have to pay the landlord's costs for right to manage? +
In most cases no, since 3 March 2025. The tribunal can order costs only if the claim was withdrawn or ended and the RTM company acted unreasonably (s 87A, s 87B).
Can commercial premises stop right to manage? +
Only if non-residential parts are more than 50% of the internal floor area. The limit was 25% until 2 March 2025.
What does the RTM company take over? +
The landlord's functions for services, repairs, maintenance, improvements, insurance and management. It cannot forfeit a lease, and the landlord keeps the freehold.
Can the RTM company members be paid? +
Directors get no pay unless a general meeting resolution states the amount. Reasonable expenses may be paid.
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