Right to Manage: How Leaseholders Take Control of Service Charges in 2026

What Right to Manage actually does

Right to Manage (RTM) is one of the most-used tools available to leaseholders unhappy with how their block is run. Unlike leasehold enfranchisement — which involves buying the freehold outright — RTM only transfers the management function. The freeholder keeps their reversionary interest and ground rent (where it still exists), but leaseholders, acting through a purpose-formed RTM company, take over:

• Collecting and administering service charges
• Choosing and instructing managing agents and contractors
• Arranging buildings insurance
• Repairs, maintenance and health and safety compliance
• Enforcing lease covenants (in most cases)

Crucially, leaseholders don't need to prove mismanagement, prove the freeholder is at fault, or go through a tribunal to justify the claim — RTM is a "no-fault" statutory right introduced by the Commonhold and Leasehold Reform Act 2002 and refined since.

Who qualifies

To exercise RTM, a building must meet several tests:

Buildings with a resident landlord occupying a flat in a small building (four units or fewer) are usually excluded.

The process, step by step

1. Form an RTM company — a private company limited by guarantee, with leaseholders as members.
2. Invite participation — notice is served on all qualifying leaseholders inviting them to become members.
3. Serve a claim notice on the freeholder and any intermediate landlords, setting out the RTM company's intention to acquire management rights.
4. Wait out the response period — the freeholder has a set period to serve a counter-notice, which can dispute the claim on eligibility grounds (not on the merits of current management).
5. Acquisition date — if unopposed or after resolving any dispute at the appropriate tribunal, management transfers on the acquisition date, typically three months after the claim is finalised.

Costs of exercising Right to Manage

There's no premium payable — this is a key difference from buying the freehold or extending a lease, both of which involve compensating the freeholder for the value given up. However, leaseholders typically face:

The requirement to pay the freeholder's "reasonable costs" has historically been a friction point, as some freeholders have run up costs to discourage claims. The 2024 Act introduces caps on litigation costs that can be passed to leaseholders in RTM disputes, addressing this directly.

Does RTM fix service charge problems?

This is the most common misconception. RTM changes who controls the service charge, not the total amount of money needed to run the building. Buildings insurance, cladding remediation, lift maintenance, cleaning and reserve fund contributions still cost what they cost. What changes is:

• Leaseholders (via the RTM company's directors, usually themselves) choose which managing agent to appoint
• Budgets are set with leaseholder oversight rather than imposed
• Contractor tenders can be shopped around rather than accepted on the freeholder's terms
• Service charge accounts are more transparent, since the RTM company is accountable to its own members

In blocks where the previous managing agent charged excessive fees or awarded contracts to connected parties, RTM can produce real savings. In blocks where costs were already reasonable, the main benefit is transparency and control rather than lower bills.

Service charge disputes that RTM doesn't resolve

Even after RTM, leaseholders can still dispute individual service charge items through the First-tier Tribunal (Property Chamber) if they believe charges are unreasonable. RTM doesn't remove this right — if anything, it makes disputes easier to resolve internally since the RTM company (controlled by leaseholders) sets the budget in the first place.

Right to Manage vs enfranchisement

Many leaseholder groups pursue RTM first as a lower-cost, faster route to control, and consider enfranchisement later if they want to remove ground rent obligations and the freeholder relationship entirely.

2024 Act changes relevant to RTM

The Leasehold and Freehold Reform Act 2024 makes several adjustments aimed at making RTM more accessible:

• Raising the non-residential floorspace threshold, so buildings with ground-floor shops or commercial units can more easily qualify
• Capping the freeholder's recoverable litigation costs in RTM disputes, reducing the financial deterrent to claiming
• Simplifying some procedural notice requirements

These changes are being phased in through secondary legislation, so leaseholders considering RTM should check the current commencement status of specific provisions before relying on them.

Bottom line

Right to Manage is a practical, no-fault route for leaseholders to take control of how their building — and their service charges — are run, without the cost and complexity of buying the freehold. It won't make repairs or insurance cheaper by itself, but it puts leaseholders in the driving seat on budgets, contractors and transparency. For blocks with a history of poor management or opaque service charge accounts, it's often the first reform worth pursuing.