What is the Right to Manage and how do leaseholders use it?

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Right to Manage (RTM) gives leaseholders a route to take control of the day-to-day management of their building, which is often used where leaseholders are unhappy with service charges, maintenance standards, or communication from the current landlord or managing agent. **Basic eligibility** To use RTM, the building generally needs to be a self-contained block containing at least two flats held by qualifying leaseholders, with no more than a limited proportion of the internal floor area used for non-residential purposes (such as shops) -- there is no requirement to prove the landlord or existing managing agent has done anything wrong; RTM is available as of right provided the eligibility criteria are met. **Setting up an RTM company** Leaseholders wishing to exercise the right must form an RTM company (a specific type of company limited by guarantee set up for this purpose), and participation generally needs to be supported by at least 50% of the total number of flats in the building before the formal claim notice is served on the landlord. **The notice process** The RTM company serves a formal claim notice on the landlord (and any other relevant parties, such as a head landlord in some structures), giving a set minimum notice period, after which -- provided the landlord does not successfully challenge the claim on eligibility grounds at a tribunal -- management responsibility transfers to the RTM company on the date specified in the notice. **Worked example** A block of 10 flats has leaseholders unhappy with poor communication and high service charges from the existing managing agent. Six of the ten qualifying leaseholders (60%, comfortably above the 50% threshold) agree to participate, form an RTM company, and serve a formal claim notice on the freeholder. Provided the block meets the basic eligibility rules and the freeholder does not successfully challenge the claim, management passes to the leaseholder-controlled RTM company, which can then appoint its own choice of managing agent (or self-manage) going forward. **What RTM does and does not change** Exercising RTM transfers MANAGEMENT functions (repairs, service charge collection and management, appointing contractors, and similar day-to-day matters) to the leaseholders' company, but it does not transfer ownership of the freehold itself -- that is a different, separate process known as collective enfranchisement, which leaseholders can pursue instead of, or in addition to, RTM if they wish to actually buy the freehold outright. **Costs involved** Leaseholders exercising RTM are generally required to pay the landlord's reasonable costs of dealing with the claim (though this has been an area of ongoing legal reform aimed at reducing what leaseholders must pay), plus their own costs of setting up the RTM company and any ongoing management costs once they take over -- these costs should be weighed against the expected improvement in management quality or reduction in charges. **When RTM might be refused** A landlord can challenge an RTM claim at the appropriate tribunal, typically on the basis that the building or the claim does not meet the eligibility criteria (for example, insufficient participation, ineligible building type, or procedural defects in the notice), rather than on the basis of the landlord's past management performance, since fault is not something RTM claims need to establish. **Practical tip** If leaseholders in your building are considering RTM, first check the building meets the basic eligibility criteria and secure at least 50% participation before incurring costs of forming an RTM company, and take specialist leasehold advice on the notice process, since procedural errors are a common reason RTM claims are successfully challenged.

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• What is collective enfranchisement and how do leaseholders buy their freehold?