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The Right to Manage (RTM) lets some leasehold property owners take over management of the building - even without the agreement of the landlord.

As a landlord, the leaseholders in your building will send you notice if they plan to do this. If they’re successful, you’ll still own the building but they’ll manage it.

This means they’ll be responsible for things like:

• collecting and managing the service charge
• upkeep of communal areas (such as communal hallways and stairs)
• upkeep of the structure of the building (such as the roof)
• dealing with complaints about the building from other leaseholders

Right to Manage companies

To use the right, leaseholders must set up an RTM company and follow certain procedures. The RTM company can manage the building directly, or pay a managing agent to do it.

As a landlord, you have the right to be a member of the RTM company and to vote on its decisions. You get at least 1 vote. How many votes you get depends on how many flats or non-residential units you own in the building. A non-residential unit could be a shop, an office or any space you own that is not a flat or shared area.

Your total votes are limited to one-third of the votes held by all leaseholders. This includes any votes you have for non-residential units you own in the building.

Example 1

Example 2

You must pay your own costs throughout the management transfer process.

To qualify for Right to Manage (RTM):

• the building must be made up of flats (houses do not qualify)
• at least two-thirds of the flats in the building must be leasehold - with leases that were for more than 21 years when they were granted
• at least 50% of the building must be residential - for example, if there’s a shop in the building, it cannot take up more than 50% of the total floor area
• any number of owners can set up an RTM company - but at least half of the flats in the building must be members of the company before it can actually take over management

If you or an adult family member lives in the building

If you or an adult family member have lived in one of the flats as your only or main home for the past 12 months, the building might not qualify for RTM. An adult family member includes your spouse, civil partner, children, step-children or parents.

In this case, the leaseholders will not be able to take over the management of the building if:

• it’s not purpose-built (for example, it’s a converted house)
• it contains no more than 4 flats in total

Normally, the leaseholders will contact you once they’ve set up the Right to Manage (RTM) company. You may get a ‘right to information’ notice from the RTM company - asking for the information they need in order to claim their Right to Manage.

You receive a ‘notice of claim’

If you receive a ‘notice of claim’ it means that the RTM company intends to take over management of the building. It will tell you:

• the date you must respond by
• the date the RTM company intends to take over management of the building

You can:

• accept the claim

• dispute the claim - the notice of claim will tell you when you need to do this by, but the deadline cannot be less than 1 month from the date of the notice

You can dispute the claim by serving a counter-notice to the Right to Manage (RTM) company. In the notice, you must explain why you think the company is not entitled to take over management of the building.

You can dispute the claim if you think:

• the building does not qualify
• the RTM company does not comply with the legal requirements
• the RTM company members do not represent half the flats in the building

You cannot dispute the claim for any other reason.

What happens if the RTM company disagrees

If the members of the RTM company think you’re wrong, the company must apply to the First-tier Tribunal (Property Chamber) within 2 months of the date of the counter-notice. The tribunal will then decide if the RTM company can manage the building.

If you accept the Right to Manage (RTM) company’s notice, or if you dispute the claim and the First-tier Tribunal (Property Chamber) decides against you, the management of the building will transfer to the RTM company.

The date the RTM company takes over management responsibilities is called the ‘date of acquisition’. This will be:

• on the date given on the notice of claim - if you accept the claim
• 3 months after the First-tier Tribunal (Property Chamber) decision becomes final - if you disputed the claim and lost
• 3 months after agreement - if you originally disputed the claim but later came to an agreement with the RTM company

You must transfer any money you have from service charges on the acquisition date - or as soon after as is reasonably possible.

Ongoing management

The RTM company must tell you at least 30 days before approving:

• an assignment (selling or transferring a flat into someone else’s name)
• a sublet
• a charge to leaseholders

If the lease says your consent is needed, the RTM company must give you 30 days’ notice before approving:

• any changes to the structure of the building
• any changes to the use of the building

For other approvals they must tell you at least 14 days in advance.