FOR RESIDENT MANAGEMENT COMPANIES
What is Right to Manage?
Learn what Right to Manage means for leaseholders, how the process works and the responsibilities that come with it.
Introduced under the Commonhold and Leasehold Reform Act 2002, Right to Manage gives leaseholders of flats the legal right to take over the management of their building from the landlord without having to buy the freehold. This is done by forming a dedicated company, known as a Right to Manage (RTM) company.
Once in place, the RTM company is responsible for the day‑to‑day management of the development. While some choose to self-manage, many appoint a professional managing agent to handle operations on their behalf – ensuring everything runs smoothly while residents retain full decision-making control.
Before starting the process, it’s important to seek legal advice. From there, experienced managing agents can guide and support you through every step. port required.
What does a RTM company do?
An RTM company takes on the core responsibilities of managing a building. This includes setting budgets, overseeing how service charges are spent, maintaining accurate financial records, and organising maintenance, repairs, and refurbishment works. An RTM company is also responsible for ensuring the building complies with all relevant legal and safety requirements.
Although the RTM company makes the decisions, it can appoint a managing agent to carry out these tasks on its behalf.
Who can set up an RTM company?
RTM is only available to leaseholders of flats and must meet a set criteria. Generally, it applies to a building where at least two-thirds of the flats are held on leases longer than 21 years, and at least half of the leaseholders participate in the RTM company.
There are also some restrictions. For example, an RTM will not apply to buildings owned by a local authority, where there is more than half of commercial space in the building, or where there are freehold houses form part of the building.
How do you set up an RTM company?
Setting up an RTM company involves a formal legal process. Leaseholders must create the company with the correct governing documents, invite eligible residents to join, and formally notify the landlord. Arrangements such as insurance must also be put in place before management responsibility transfers.
Because the process can be complex and detailed, many leaseholders choose professional support to ensure everything is completed correctly.
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Frequently asked questions
Right to Manage is a legal right specifically designed for leaseholders of flats. It does not apply to freehold homeowners or to houses.
If you own your property as a freehold, you already have control over its management and are responsible for arranging maintenance and services directly. In developments where freehold houses share communal areas, alternative arrangements, such as resident management companies, are typically used instead of RTM.
One of the biggest advantages of RTM is decision-making control over the management of the building. Leaseholders are able to make decisions about how their building is run, from how money is spent to what works are prioritised.
It also creates a shared voice, as all members of the RTM company have equal voting rights. This ensures decisions reflect the needs of the community.
RTM companies also have the freedom to choose their managing agents and suppliers, helping them achieve better value and service quality.
RTM does come with responsibilities. Directors of the company must be willing to commit time and take on legal duties and liabilities. Managing a building also requires an understanding of property law and compliance regulations, which can be complex.
For this reason, many RTM companies appoint professional managing agents to provide expertise and reduce the workload.
Appointing a managing agent is optional, but often beneficial. A good managing agent can handle day-to-day management, support with compliance, manage contractors, and provide guidance to Resident Directors.
Importantly, the RTM company remains in full control and simply instructs the agent on what needs to be done.
With the right support, leaseholders can successfully set up and run an RTM company without becoming overwhelmed. Experienced managing agents can guide you through the formation process and provide ongoing management services tailored to your development.
This allows Resident Directors to stay in control while benefiting from professional expertise and a well-managed community.
We can support your Right to Manage company
If you’re considering Right to Manage, FirstPort is here to guide you through every step, from setting up your RTM company to providing expert, ongoing property management support.
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