Right to Manage Companies: Empowering Leaseholders to Take Control

Right to Manage Companies (RTM companies) provide leaseholders with a legal pathway to take control of how their residential building is managed. Introduced under the Commonhold and Leasehold Reform Act 2002 in the UK, the Right to Manage (RTM) allows qualifying leaseholders to assume management responsibilities without having to purchase the freehold. This gives residents greater influence over costs, service standards, and day-to-day property operations.

What Are Right to Manage Companies?

Right to Manage Companies are special-purpose companies formed by leaseholders to exercise their statutory right to manage a building. Once the RTM process is successfully completed, the RTM company becomes responsible for managing services such as maintenance of communal areas, building insurance, service charge collection, and health and safety compliance.

Importantly, Right to Manage Companies take over management duties only, not ownership of the building. The freeholder retains ownership but loses control over how the property is managed.

How the Right to Manage Process Works

To qualify, at least 50% of eligible leaseholders must support the RTM application, and the building must meet specific criteria set out in legislation. Once formed, the RTM company serves formal notices on the freeholder and, after the statutory notice period, management control is transferred.

Although the process is structured, it can be legally complex. Many Right to Manage Companies appoint professional managing agents to ensure a smooth transition and ongoing compliance with property law.

Benefits of Right to Manage Companies

One of the key advantages of Right to Manage Companies is improved transparency. Leaseholders gain direct oversight of service charges and expenditure, helping to prevent unnecessary costs. RTM also allows residents to appoint managing agents of their choice or self-manage if appropriate.

In many cases, RTM leads to better maintenance standards, faster response times, and a stronger sense of community involvement. Decisions are made in the best interests of residents rather than external parties.

Conclusion

Right to Manage Companies offer leaseholders a powerful way to take control of their living environment. By combining legal rights with professional property management support, RTM companies can improve service quality, manage costs effectively, and protect the long-term value of residential buildings.