What is the Right to Manage (RTM)?

RTM gives leaseholders the legal right to take over the management of their building from the freeholder, without needing to purchase the freehold. This allows residents to appoint their own managing agent and have full control over service delivery, costs, and standards.

How long does the RTM process take?

Once at least 50% of qualifying leaseholders have joined the RTM Company, the formal legal process typically takes around 4–5 months to complete.
If the freeholder disputes the claim and the matter goes to Tribunal, this can extend the timeline by several additional months.

How much does RTM cost?

The cost of undertaking RTM is typically around £95 + VAT flat as a one-off fee.
Importantly:

• There are no upfront costs for leaseholders

• Costs are only payable if the RTM is successful

• The cost is not immediately payable and is usually recovered once a full handover from the current agent to the newly appointed agent has been completed

Will we get a better service?

Yes. Under RTM, the managing agent is appointed by and accountable to leaseholders—not the freeholder. This typically leads to improved service levels, better communication, and performance-based management.

Will we save money?

In many cases, yes. RTM allows leaseholders to:

• Appoint competitively priced contractors

• Challenge unnecessary costs

• Prioritise essential works and delay non-essential spending

This often results in better value for money over time.

Who runs the RTM Company?

The RTM Company is run by volunteer directors (leaseholders). Initially, these are the founding members who set up the process, with the intention of transitioning to a more formal, elected structure once RTM is achieved.

Are RTM directors paid?

No. Directors are volunteers and receive no salary or financial benefit.

What are the responsibilities of the RTM Board?

The Board oversees the managing agent and ensures the building is run in the best interests of leaseholders. Their role includes:

• Appointing and managing the managing agent

• Monitoring performance through KPIs

• Approving budgets and major works

• Ensuring transparency and communication

How are costs and major works managed?

The RTM Board sets spending limits for day-to-day repairs. For major works (typically over £250 per leaseholder), a formal Section 20 consultation is required.
This ensures transparency and gives leaseholders a say in significant expenditure.

Can I get involved or become a director?

Yes. Leaseholders are encouraged to get involved. Directors should be willing to contribute time, attend meetings, and support the running of the building.

What is the role of directors after RTM?

RTM directors are responsible for high-level decision-making, including:

• Approving budgets and major expenditure

• Setting service standards

• Reviewing accounts

Day-to-day management is handled by the managing agent, so directors are not involved in routine queries.

How is the RTM Company typically structured?

For a building of this size, the RTM Company would usually have 3–5 volunteer directors, working alongside the managing agent.
Directors typically meet the property manager on a monthly basis to review performance and key decisions.

Are directors protected from liability?

Yes. The RTM Company will have Directors’ & Officers’ (D&O) insurance, typically costing around £350 per year, which is recoverable through the service charge.

Will RTM reduce building insurance costs?

Potentially, yes. In many cases:

• Existing freeholder-arranged insurance can be above market rates

• Switching to a new policy under RTM can result in significant savings (often around 20–25%)

• In some cases, savings have been substantial (e.g. six-figure annual reductions on larger sites)

A new policy can be put in place immediately upon RTM, with a pro-rata refund from the existing policy.

What happens to reserve funds and existing balances?

All reserve funds and any positive service charge balances must be transferred to the RTM Company, as these funds belong to leaseholders—not the freeholder or managing agent.

What happens to service charge arrears?

Pre-RTM arrears are typically:

• Pursued by the outgoing managing agent, or

• Transferred via a legal undertaking, allowing the new managing agent to recover outstanding amounts

Can we challenge historic service charges after RTM?

Yes. After RTM, leaseholders may choose to:

• Request detailed accounts under Sections 21 and 22

• Challenge costs via Section 27A, going back up to 6 years

This can include reviewing items such as insurance premiums and contractor costs.

Can leaseholders pursue a claim for overcharging?

Potentially, yes. If evidence suggests overcharging (e.g. insurance or contracts), leaseholders may pursue a group claim, often with specialist solicitors.
These claims are frequently resolved through negotiated settlements, but whether to proceed is a commercial decision made after reviewing the documentation post-RTM.