Right to Manage (RTM) Solicitors

We don’t currently offer this service but please do speak to us as we can recommend people who can assist you.

Right to Manage provides a right for leaseholders to take over the management of their building from the freeholder via a Right to Manage (RTM) Company.  

This is a powerful tool for leaseholders as it allows them to set the level of service charges and management of the building as they see fit.  It is a no fault process, so regardless of how the freeholder manages the building, the leaseholders can exercise this right.

At Birkett Long, we have a specialist leasehold team with experience advising clients in relation to all aspects of buying, selling and owning leasehold property. Call our expert Real Estate team on 01245 453873.

What is the qualification criteria for a Right to Manage?

• The right applies to leaseholders of a building or part of a building containing at least 2 flats.
• At least two-thirds of the flats in the building must be owned by long leaseholders (leases of more than 21 years when first granted)
• At least half of the flats in the building, held by long leaseholders, must take part.
• The building does not qualify for RTM if the non-residential areas make up more than 25% of the whole floor area of the building.
• The building may not qualify if there are four or fewer flats and there is a resident landlord.

What is the Right to Manage procedure?

• Participating leaseholders must set up an RTM company using prescribed articles of association. 
• An investigation of title and consultation with a surveyor (if applicable) to ensure the flat owners and building qualifies;
• A notice inviting participation must be served on all leaseholders who are not members of the RTM Company.  Two weeks after the notices of invitation to participate have been served, a notice of claim must be served on the freeholder;
• The freeholder can challenge the RTM Company’s claim with a counter-notice within one month.  If the freeholder challenges the claim, they can apply to the First Tier Tribunal (FTT), for a ruling as to whether the RTM Company has the right to manage.
• If the freeholder does not challenge or does not respond to the RTM Company’s claim, the RTM company acquires the Right to Manage four months from the date of the notice of claim. (“the acquisition date”)
• The freeholder has to notify the RTM company of existing contractors and also notify those contractors of the take over by the RTM company
• The freeholder is entitled to apply to be a member of the RTM company after the acquisition date.

What will the RTM Company acquire?

The RTM Company will take over the responsibility of the management of the building as set out in the leases. 

Management

The RTM company does not have to keep the freeholder's existing contractors, e.g. managing agents. They can employ their own agents, or manage the building themselves.

Unless a small block/conversion of say 6 flats or less, it is advisable to appoint a professional managing agent.  Further advice can be found from the Association of Residential Managing Agents (see link below).

The freeholder has to be kept informed of certain matters such as consents eg to alterations or lettings.

The RTM Company can enforce the leaseholder’s covenants against a defaulting leaseholder (i.e. non payment of service charge).  However, the remedy of forfeiture (i.e. termination of the lease) is still retained by the freeholder.

RTM Company

Some of the leaseholders will become officers or directors of the RTM company.  This means taking on certain responsibilities of being a company director but also responsibilities as landlords of residential property.  The company and its directors will be legally required to comply with a wide range of company, housing and health and safety laws.  Further advice can be provided on these issues upon request.

What do the leaseholders pay?

There is no premium for a right to manage as with a collective enfranchisement so can be a cheaper alternative.  In addition to our costs (and any valuer’s costs where appropriate), leaseholders will be liable to pay the freeholder’s costs for investigating whether the leaseholders are eligible to acquire the right to manage.

Useful sources

Association of Residential Managing Agents - https://arma.org.uk/