What Is the Right to Manage a Leasehold Property?

Leasehold property ownership in England and Wales comes with a range of legal rights and responsibilities. For many leaseholders of flats, the Right to Manage (RTM) is a statutory mechanism that empowers leaseholders to take over certain management functions from the landlord without buying the freehold. This right gives leaseholders greater control over how their building is maintained, how service charges are handled, and how management decisions are made - and it can be exercised even if the existing management is satisfactory, because RTM does not require proof of mismanagement.

This article explains what the Right to Manage is, who qualifies, how leaseholders can exercise it, what responsibilities they assume, and what practical and legal considerations arise during the process.

What Is the Right to Manage?

The Right to Manage is a statutory right created under the Commonhold and Leasehold Reform Act 2002. It allows leaseholders of flats in eligible buildings to form a special company (an RTM company) that takes on the landlord's management functions. Unlike enfranchisement (buying the freehold), leaseholders do not need to pay a premium for this right, and they do not need to prove poor management by the landlord or managing agent.

Once the right has been properly claimed and acquired, the RTM company becomes responsible for managing the building in place of the landlord, subject to the terms of the leases and statutory safeguards.

Who Can Exercise the Right to Manage?

To qualify for the Right to Manage, certain legal conditions must be met by both the building and the leaseholders involved:

1. Qualifying Building

A building will generally qualify for RTM if:

• It is a self‑contained building or part of a building containing flats.
• It contains at least two flats.
• At least two‑thirds of the flats must be held by qualifying leaseholders - landlords' flats or non‑qualifying leases may not count.
• Non‑residential space (for example shops or offices) must not exceed a specified percentage of the building's area. The limit was originally 25 %, but reforming legislation has increased this threshold to 50 %, meaning more buildings now qualify.

Buildings that do not generally qualify include blocks where a local housing authority is the immediate landlord, certain buildings with resident landlords under specific conditions, or buildings that do not meet basic structural and ownership criteria in the statute.

2. Qualifying Leaseholders

Leaseholders who can take part in an RTM claim typically must:

• Hold a long lease, defined as a lease originally granted for more than 21 years.
• Not hold a business lease in respect of the flat - RTM is focused on residential leasehold.
• Participate in or support the RTM claim through a dedicated RTM company.

Leaseholders collectively must meet the participation thresholds set by law (for example, membership of the RTM company by qualifying leaseholders representing at least half of the flats).

How Does the Right to Manage Process Work?

Although the Right to Manage is designed to be accessible, it involves formal legal steps and documentation. A failure to comply with procedures can delay or jeopardise a RTM claim.

1. Form an RTM Company

Leaseholders must first set up a Right to Manage company. This must be a private company limited by guarantee with constitutional documents specifying that one of its objects (or its sole object) is to exercise the Right to Manage in respect of the premises.

All qualifying leaseholders should be invited to become members of the RTM company, and the company structure must reflect legal requirements.

2. Serve Notices

The RTM company must serve:

• A Notice Inviting Participation on all qualifying leaseholders.
• A Notice of Claim on the landlord and others with relevant interests (for example, charge holders).

These notices must contain specified information and follow formats set out in statute; failure to use correct wording may render a notice invalid.

3. Landlord's Response and Tribunal Involvement

Once the Notice of Claim is served:

• The landlord can serve a counter‑notice if they believe the RTM claim is invalid due to failing to meet qualifying conditions.
• If there is a dispute about qualification, either party can apply to the First‑tier Tribunal (Property Chamber) in England or the Leasehold Valuation Tribunal in Wales. The tribunal decides whether the RTM company is entitled to acquire the right.

If the landlord does not validly serve a counter‑notice, the RTM company will normally acquire the right on the date specified in the Notice of Claim.

4. Taking Over Management

Once the Right to Manage is acquired:

• The RTM company assumes responsibility for management functions previously held by the landlord, such as arranging repairs, maintenance, insurance, and managing service charges.
• The RTM company must act in accordance with the leases and any statutory duties. Service contracts, insurance policies and unspent service charges held by the landlord must usually be transferred to the RTM company.

The landlord retains ownership of the freehold and certain residual rights (for example, forfeiture for breach of a lease), but loses day‑to‑day management control in relation to the residential units covered by the RTM.

Practical Responsibilities After Acquiring the RTM

Once management functions pass to the RTM company, leaseholders collectively take on operational responsibilities that can include:

• Collecting and managing service charges.
• Maintaining communal areas and building structure.
• Arranging insurance and compliance with statutory obligations.
• Dealing with leaseholder concerns and lease compliance matters.

Many RTM companies engage a professional managing agent to handle day‑to‑day administration, but this is a commercial decision rather than a legal requirement.

Cost and Time Considerations

• There is no premium payable for the right itself, unlike freehold enfranchisement.
• Participants remain responsible for their own legal, professional and incorporation costs.
• Until reforms taking effect in 2025, the RTM company was often required to pay the landlord's legal costs in a standard claim; modern amendments have reduced or removed this requirement in many cases, lowering financial barriers for leaseholders.
• The time to complete a RTM claim varies with complexity, the accuracy of notices, and whether the landlord contests the claim.

Common Questions and Practical Issues

Do I Have to Prove Poor Management?

No. The Right to Manage is a “no‑fault” statutory right. Leaseholders do not have to demonstrate mismanagement by the landlord or managing agent to qualify.

Does Exercising RTM Change Ownership of the Property?

No. Exercising the Right to Manage gives leaseholders control of management functions, not ownership of the freehold. Ownership remains with the landlord or freehold owner.

Can a Landlord Object?

Yes. A landlord can object by serving a counter‑notice, but only on statutory grounds (for example, if qualifying conditions are not met). Disputes over qualification are decided by a tribunal.

What Happens If the Building Has Extensive Commercial Space?

Historically commercial space exceeding 25 % could disqualify a building, but recent reforms have increased this threshold to 50 %, widening eligibility for RTM.

Key Takeaways

The Right to Manage is a statutory option under the Commonhold and Leasehold Reform Act 2002 that empowers qualifying leaseholders of flats to take responsibility for the management of their building without buying the freehold or proving bad management.

Key aspects include:

• Forming a Right to Manage company.
• Meeting statutory qualifying conditions for the building and leaseholders.
• Serving prescribed legal notices and responding to counter‑notices.
• Transferring management functions once entitled.

Exercising RTM gives leaseholders control over repairs, service charges and day‑to‑day management while the freeholder retains ownership and residual rights. Because the process involves precise legal requirements and potential tribunal involvement, many leaseholders seek specialist advice to ensure notices are valid and procedures are followed.