A no-fault statutory right. You do not need to prove the freeholder has done anything wrong. Complete guide to qualifying criteria, the process, what freeholders can actually do to oppose it, and what happens after you acquire RTM.
RTM Company Management →Key facts at a glance
A right created by the Commonhold and Leasehold Reform Act 2002. Gives qualifying leaseholders the legal right to take over management functions — appointing and dismissing the managing agent, managing the service charge, overseeing maintenance and compliance.
RTM does not give leaseholders the freehold. The freeholder remains the freeholder. It does not reduce ground rent or change lease terms. It transfers management functions, not ownership.
Most RTM applications follow extended periods of management failure — service charge accounts that don't add up, compliance neglected, major works handled badly or not at all. RTM is often the point leaseholders decide the only reliable solution is to take control themselves.
Both the building and the leaseholders must meet the criteria. Check all of them before committing to the process.
| Criterion | What is required |
|---|---|
| Building type | A self-contained building or part of a building capable of independent management. Detached, semi-detached, and purpose-built blocks all qualify. A conversion where multiple flats share a freehold typically qualifies. |
| Residential use | At least two thirds of the flats in the building must be held on long leases (over 21 years at grant) by qualifying tenants. |
| Non-residential use | No more than 25% of the internal floor area (excluding common parts) can be non-residential. A building with a large commercial ground floor may fail this test. |
| Qualifying tenants | A leaseholder holding a long lease (over 21 years at grant). A leaseholder who holds more than two flats in the building is not a qualifying tenant for RTM purposes. |
| Participation threshold | At least 50% of the qualifying leaseholders in the building must participate in the RTM company. A building with 10 qualifying leaseholders needs at least 5 members. |
| Excluded buildings | Certain buildings are excluded: those where the freeholder is a local authority or registered social landlord in specified circumstances, and certain converted buildings. If in doubt, take legal advice. |
The 50% threshold is 50% of qualifying leaseholders, not 50% of flats. If the freeholder owns flats in the building, those flats count toward the total number of qualifying tenants — but the freeholder is not a qualifying tenant and cannot participate. This can affect the 50% calculation. Get the count right before serving the Claim Notice — a notice served with insufficient participation is invalid.
Errors in the process — particularly in the Claim Notice — can invalidate the application and require the process to start again. Follow the steps in order.
Must be formed before the Claim Notice is served. A private company limited by guarantee, with articles of association complying with the RTM Company (Model Articles) (England) Regulations 2009. Qualifying leaseholders who wish to participate become members. At least one director required.
Before serving the Claim Notice, the RTM company must give notice to all qualifying leaseholders who are not already members, inviting them to participate. This must be given at least 14 days before the Claim Notice is served.
The formal notice to the freeholder claiming the right to manage. Must contain specific information required by the 2002 Act: details of the building, the RTM company, the proposed acquisition date (at least one month after the notice is received by the freeholder), and an invitation to respond.
The freeholder has one month from receiving the Claim Notice to serve a Counter-Notice. If the freeholder does not serve a Counter-Notice, RTM is acquired automatically on the acquisition date specified in the Claim Notice.
A freeholder who wishes to oppose must serve a Counter-Notice admitting or denying the right. If the freeholder denies the right, they must state the grounds. The RTM company can apply to the First-tier Tribunal to determine whether the right exists. The freeholder can only oppose on statutory grounds — they cannot simply refuse.
On the acquisition date, management transfers to the RTM company. The freeholder and outgoing managing agent must hand over the management file, service charge accounts, and client money held on behalf of the building. The RTM company is now responsible for the management of the building.
The RTM right is no-fault. The freeholder cannot oppose it simply because they disagree or believe they have managed the building well. Their ability to oppose is limited to specific statutory grounds.
| Freeholder says | The reality |
|---|---|
| "You don't have enough leaseholders on board" | Check the threshold carefully. 50% of qualifying leaseholders must participate — but the freeholder's own flats count toward the total without the freeholder being a qualifying tenant. Recount before accepting this. |
| "The building doesn't qualify" | Get independent legal advice. Freeholders sometimes assert disqualifying conditions that do not exist or are contested. The Tribunal determines qualification disputes, not the freeholder. |
| "Your Claim Notice is defective" | This may be true — errors in the Claim Notice can invalidate it. Take legal advice, correct the error, and serve a fresh notice. A defective notice is a procedural setback, not a substantive barrier. |
| "Management will be worse without us" | Not a statutory ground for opposition. The freeholder cannot oppose RTM on the basis that they believe their management is good or that leaseholders will manage less well. |
| "We'll make this very difficult for you" | Opposition to a valid RTM application is determined by the First-tier Tribunal. The freeholder bears their own legal costs in Tribunal proceedings unless the Tribunal awards costs against the leaseholders. |
Acquiring the right to manage is the beginning of a new phase, not the end of the process. The RTM company is now responsible for the management of the building. Most RTM companies appoint a professional managing agent to carry out the day-to-day management on their behalf.
RTM directors taking over from a poorly performing freeholder or agent frequently inherit problems — incomplete accounts, compliance gaps, unresolved maintenance, missing documents. The first priority is to understand the real position: what are the accounts, what is the compliance status, where is the money. An experienced managing agent will conduct a full financial and compliance audit before active management begins.
Communication matters. RTM directors are leaseholders themselves — not professional property managers. They need a managing agent who explains clearly, is accessible, and manages the relationship between the RTM company and the individual leaseholders professionally.
The building you take over is not the building you thought you were getting. Almost every RTM director says this in the first few months. The financial records are less clear than expected. The compliance position is worse. Documents are missing. This is not exceptional — it is normal when management has been poor. The right response is a methodical audit, honest reporting to directors, and a clear plan for addressing what is found. We do this on every RTM takeover.
We manage residential blocks for RTM companies across London and Essex. Financial audit on day one, online portal from week one, compliance review before we begin. If you are planning RTM and want to understand what professional management looks like afterwards, start with a conversation.
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