Taking Control: What Leaseholders Should Know About Right to Manage

The Right to Manage (RTM) gives qualifying leaseholders the ability to take over the management of their building, a welcome option in today’s economy where service charges keep rising, repairs are slow, and transparency is often lacking. 

Introduced by the Commonhold and Leasehold Reform Act 2002, RTM can be a powerful tool, but it’s often misunderstood. When approached carefully, it gives leaseholders real autonomy. If rushed, it can lead to costly consequences. 

What RTM Really Means

RTM doesn’t transfer ownership of a building or eliminate ground rent, but it does allow leaseholders to take control of:

• Service charge budgets
• Day-to-day maintenance
• Appointing contractors
• Building insurance (in some cases)
• Compliance with statutory obligations

The landlord doesn’t disappear once RTM is granted. They may retain some key rights, including the enforcement of leases and responsibility for structural matters. Leaseholders remain bound by their lease obligations.

What Leaseholders Should Know Before Starting

1. You need to be a company – RTM can only be exercised through a private company limited by guarantee. Your WhatsApp group chat won’t suffice. At least 50% of your building’s qualifying tenants must take part. 
2. Not every building qualifies – Some buildings, for example, those with too much commercial space, may be excluded. Local authority-owned buildings also don’t qualify under the legislation.  
3. There’s no room for error – Mistakes in the RTM Claim Notice can invalidate the process and leave room for the landlord to object. Precision matters here. 
4. You still need to manage it well – Once RTM is in place, the company must operate like any responsible landlord. It must comply with relevant regulations, manage funds responsibly and ensure the building is properly maintained. 

It Pays to Slow Down

RTM can be empowering but it’s not risk-free. If handled poorly, it can lead to: 

• Tension amongst leaseholders
• Costly disputes with the landlord 
• Tribunal or court proceedings 
• Legal and financial exposure

If you’re considering RTM, seek early professional advice, check eligibility carefully, and plan not just for the takeover, but for the long-term management that follows. 

How Pinney Talfourd can help

If you are considering exercising your Right to Manage, our Property Litigation team can guide you through every stage, from assessing eligibility and setting up the RTM company to serving notices and resolving any disputes that may arise.