Commonhold And Leasehold Reform: Right To Manage Essentials
If you own a flat and your building is managed by a freeholder, the law gives you the right to take control. Under the Commonhold and Leasehold Reform Act 2002, leaseholders can form a Right to Manage (RTM) company to take over the management of shared areas — such as hallways, gardens, repairs, and communal utilities.
Importantly, you don’t need to prove poor management. RTM is a ‘no-fault’ right — leaseholders simply need to follow the legal process to qualify.
Understanding Managing Agents vs Management Companies
Most buildings are run by managing agents appointed by a freeholder or management company. This is different from a residents’ management company (RMC) or RTM company, which is formed by leaseholders to take direct control.
Some smaller blocks manage themselves informally, but this doesn’t remove the legal obligations that come with managing a property. In most cases, a professional agent is still needed to handle compliance, budgeting, repairs, and contractor coordination.
Why Leaseholders Choose RTM
Leaseholders often pursue RTM due to:
- High costs or lack of transparency
- Poor communication and service standards
- Desire for greater control over how their building is run
RTM gives leaseholders the power to appoint their own agent or renegotiate terms with the current one — improving service quality and accountability.
Things to Consider
RTM doesn’t remove the freeholder entirely — they are legally entitled to join the RTM company and must be consulted on key matters. Also, taking on RTM is a commitment: leaseholders will need to appoint directors, hold meetings, and meet legal responsibilities.
In some cases, it may make more sense to negotiate improved terms with the current managing agent, especially if service is adequate and relations are strong.
Final Thought
Whether or not you pursue RTM, understanding your rights and responsibilities is key. Always seek advice from experienced managing agents — particularly those regulated by The Property Institute (TPI) — before taking action.