The Complete Step-by-Step Guide to Right to Manage (RTM) in England & Wales

1. What is Right to Manage (RTM)?

Introduced by the Commonhold and Leasehold Reform Act 2002, the Right to Manage allows leaseholders to collectively take over the management functions of their building from the landlord without needing to prove bad management and without having to pay a purchase price for the freehold.

Once acquired, the RTM company is responsible for setting service charges, hiring contractors, obtaining insurance, and enforcing lease covenants.

2. Qualifying Criteria for Your Building

Before spending money or incorporating an RTM company, verify that your development meets the statutory criteria:

• The building must be a self-contained building or an independent part of a building.
• It must contain at least two flats.
• At least two-thirds (66%) of all flats must be owned by "qualifying tenants" (leases granted for more than 21 years).
• Commercial floor space cannot exceed 25% of the total internal floor area.
• At least 50% of the total qualifying tenants must become members of the RTM company before serving the claim notice.

3. The Step-by-Step Procedure

Step 1: Incorporate the RTM Company at Companies House using the statutory Articles of Association.

Step 2: Serve the Notice of Invitation to Participate (Section 78) on all leaseholders who have not yet agreed to join. You must allow at least 14 days for them to respond.

Step 3: Serve the formal Claim Notice (Section 79) on the landlord/freeholder, any intermediate landlords, and the current managing agent. The notice specifies a counter-notice date (minimum 1 month away) and the target acquisition date (at least 3 months after the counter-notice date).

Step 4: Handle any Counter-Notices. If the landlord claims the building does not qualify, you can apply to the First-tier Tribunal within 2 months for determination.

Step 5: Handover and Transfer of Management on the Acquisition Date.