Right to Manage: How Leaseholders Are Taking Control of Their Blocks

For decades, leaseholders in England and Wales have complained of feeling powerless over the buildings they live in and pay for, at the mercy of freeholders and managing agents they neither chose nor can easily remove. The Right to Manage (RTM), introduced by the Commonhold and Leasehold Reform Act 2002, was designed to change that. Two decades on, and with the Leasehold and Freehold Reform Act 2024 now on the statute book, RTM is once again at the centre of the leasehold reform debate.

For managing agents and landlords, understanding RTM is no longer optional. It is a live commercial risk, a governance opportunity, and increasingly a marker of how professional and transparent your service really is.

What Is Right to Manage?

RTM allows qualifying leaseholders to take over the management of their building without having to prove fault on the part of the freeholder or landlord, and without needing to buy the freehold itself. It is a "no-fault" right, meaning leaseholders do not need to demonstrate mismanagement, poor service, or unreasonable charges to exercise it.

Once RTM is successfully claimed, an RTM company (a company limited by guarantee, formed specifically for this purpose) assumes responsibility for management functions previously exercised by the landlord or their agent. This typically includes:

• Arranging buildings insurance
• Managing repairs, maintenance, and major works
• Collecting service charges and ground rent (on behalf of the landlord)
• Appointing and instructing a managing agent

Crucially, RTM does not transfer ownership of the freehold. The landlord retains their reversionary interest; leaseholders simply gain control over how the building is run day-to-day.

Qualifying for RTM: The Current Rules

Under existing legislation, a building must generally meet several criteria before leaseholders can claim RTM:

• The building must be a self-contained structure (or part of one) consisting of two or more flats
• At least two-thirds of the flats must be let to qualifying leaseholders (typically those with leases originally granted for more than 21 years)
• No more than 25% of the building's floor area (excluding common parts) can be non-residential
• At least 50% of qualifying leaseholders must participate in the RTM claim

The process itself involves forming an RTM company, serving a formal "claim notice" on the landlord, and allowing a statutory response period. Landlords can only challenge a claim on limited technical grounds, such as failure to meet the qualifying criteria, they cannot refuse simply because they disagree with the principle.

The Leasehold and Freehold Reform Act 2024: What's Changing

The government's stated ambition, reiterated by the Ministry of Housing, Communities and Local Government, is to make it easier and cheaper for leaseholders to exercise RTM. Key reforms include:

• Removing the non-residential floor space cap from 25% to potentially higher thresholds, allowing more mixed-use buildings to qualify
• Costs reform, so leaseholders are no longer required to pay the landlord's legal and valuation costs when making an RTM claim, a significant barrier historically
• Streamlining the notice process to reduce procedural complexity and technical grounds for challenge

These changes represent one of the most significant shifts in leasehold law since 2002. Industry commentary, including analysis from the Leasehold Advisory Service (LEASE) and coverage in trade publications, suggests the removal of the "loser pays" costs rule alone could dramatically increase RTM applications, particularly in buildings where leaseholders were previously deterred by the financial risk of a failed or contested claim.

What This Means for Managing Agents

For managing agents, RTM is not simply a legal curiosity, it is a direct commercial threat and, handled well, an opportunity. Agents who are appointed by a freeholder can find themselves replaced overnight once an RTM company takes control, particularly where leaseholders have grown frustrated with poor communication, unclear service charge accounting, or unresponsive repairs handling.

The single biggest predictor of an RTM claim is not cost, it is trust. Buildings where leaseholders feel informed and consulted rarely see successful RTM applications; buildings where they feel shut out almost always do.

Conversely, RTM companies themselves frequently need professional management support once they take control. Many newly formed RTM companies, staffed by volunteer directors with day jobs, quickly discover that running a block competently requires the same statutory compliance, accounting rigour, and communication that professional agents provide. This creates a genuine opportunity for agents who can demonstrate transparency and modern service delivery to win the trust, and the instruction, of RTM companies.

Practical Steps for Agents and Landlords

Rather than treating RTM as a threat to be resisted, forward-thinking agents and freeholders should focus on the fundamentals that make RTM claims less likely, or that position them well when a claim does succeed:

• Transparent service charge accounting, with clear, timely demands and reconciliations in line with the Landlord and Tenant Act 1985 (as amended) and RICS Service Charge Residential Management Code
• Proactive communication around major works, budgets, and section 20 consultations
• Digital access to documents, accounts, and correspondence, reducing the information asymmetry that often fuels leaseholder frustration
• Responsive complaints handling, ideally through a recognised redress scheme such as The Property Ombudsman or Property Redress Scheme

This is where modern property management platforms are proving valuable. Tools like WiseBlock allow agents and RTM company directors alike to give leaseholders real-time visibility of accounts, documents, and maintenance requests, directly addressing the transparency deficit that so often drives RTM claims in the first place. For RTM companies newly in control of their building, this kind of platform can also dramatically reduce the administrative burden on volunteer directors who suddenly find themselves responsible for statutory compliance.

Looking Ahead

With the 2024 Act's RTM provisions expected to come into force through secondary legislation over the coming months, agents, landlords, and leaseholders alike should prepare for a landscape where taking control of a building is simpler, cheaper, and more common than ever before. As commentary from Arthur Online and MRI Software has consistently noted, the direction of travel in leasehold reform is unmistakably towards greater leaseholder empowerment and transparency.

For managing agents, the message is clear: the buildings least likely to face an RTM claim are those already being run the way RTM promises to deliver, transparently, responsively, and with leaseholders treated as genuine stakeholders rather than passive fee-payers.