Right to Manage: Eligibility & Leaseholder Mobilisation Guide

Right to Manage: Navigating Eligibility and Uniting Leaseholders

Residentive Editorial 10/08/2026 5 min read

Discover the essential first steps for a Right to Manage (RTM) claim: understanding eligibility criteria and effectively mobilising leaseholders to form your RMC. Residentive provides expert guidance.

Reviewed by Residentive EditorialPublished 10/08/2026Last reviewed 16/10/2026

Embarking on a Right to Manage (RTM) journey begins with verifying strict statutory eligibility criteria, incorporating a dedicated RTM company, and mobilising qualifying leaseholders before any formal notices can be served. Governed by the Commonhold and Leasehold Reform Act 2002, this statutory process enables leaseholders to take legal control of communal building operations without buying the freehold or proving landlord fault.

Key takeaways

The Right to Manage is governed by the Commonhold and Leasehold Reform Act 2002, requiring a self-contained building or part of a building with at least two flats.
At least two-thirds (66.6%) of the total flats in the building must be held by qualifying leaseholders (leases originally granted for more than 21 years).
The RTM company must represent qualifying leaseholders holding at least 50% of the total number of flats in the building to serve a valid Notice of Claim.
The legal vehicle must be an RTM Company Limited by Guarantee, strictly adopting the prescribed statutory Model Articles under the 2009 Regulations.
Under the Leasehold and Freehold Reform Act 2024, the non-residential floor space threshold for RTM qualification was increased from 25% to 50%, opening eligibility to significantly more mixed-use blocks.

Verifying Building and Lease Eligibility

Before incurring legal or administrative costs, leaseholders must confirm that the property satisfies the statutory requirements set out in Section 72 of the Commonhold and Leasehold Reform Act 2002:

Self-Contained Structure: The property must be an independent building or a structurally self-contained part of a building (capable of being redeveloped independently, with separate utility supplies).
The Two-Thirds Rule: At least two-thirds of the total flats in the building must be held by "qualifying leaseholders." A qualifying leaseholder is an owner whose long residential lease was originally granted for a term exceeding 21 years.
The 50% Residential Floor Space Test: Historically, buildings with commercial spaces (such as ground-floor retail or offices) exceeding 25% of internal floor area were disqualified. The Leasehold and Freehold Reform Act 2024 increased this commercial cap to 50%, expanding RTM eligibility to modern, mixed-use urban developments.
Excluded Properties: RTM does not apply to local authority tenancies, buildings where a resident landlord has lived on-site in a conversion of four or fewer units since before the flats were leased, or schemes where the freehold is Crown-owned (unless statutory exemptions apply).

Forming the Statutory RTM Company

Unlike a standard commercial Residents' Management Company (RMC), an RTM claim legally requires the incorporation of a dedicated corporate vehicle at Companies House:

Company Limited by Guarantee: The entity has no share capital; participating leaseholders join as members acting as guarantors for a nominal statutory sum (usually £1).
Prescribed Articles of Association: The company must strictly adopt the statutory constitution defined by the RTM Companies (Model Articles) (England) Regulations 2009. Altering the objects or drafting bespoke articles can invalidate the subsequent Notice of Claim.
Statutory Name Requirements: The company name must end with the designation "RTM Company Limited" or "RTM Company Ltd".

Mobilising Leaseholders and Statutory Voting Rules

To serve a valid claim, the RTM company must achieve a statutory minimum membership:

The 50% Threshold: The membership of the RTM company must comprise qualifying leaseholders of at least 50% of the total number of flats in the block (Section 79(5) of the 2002 Act). For example, in a block of 10 flats, owners representing at least 5 flats must formally join as company members.
Notice of Invitation to Participate (NIP): Under Section 78, the RTM company cannot serve a Notice of Claim without first issuing a formal NIP to every qualifying leaseholder who has not yet joined. The NIP must give non-members a statutory minimum of 14 days to join, detailing the company's registration and governance structure.

Overcoming Mobilisation Barriers

Building consensus among leaseholders requires transparent communication and practical reassurance:

Addressing Apathy: Non-resident landlords and buy-to-let investors often fear unexpected costs or administrative workload. Demonstrating that taking control allows the block to benchmark insurance rates, eliminate agency markups, and appoint professional, independent contractors provides clear financial incentive to participate.
Appointing Operational Management: Participating leaseholders should understand that acquiring management covenants does not require volunteer directors to manage day-to-day repairs themselves. The RTM board can appoint a professional managing agent or deploy structured operational software to handle maintenance dispatch, accounting trust funds, and statutory compliance.

Preparing for the Notice of Claim

Once the 50% membership threshold is achieved and all statutory Notices of Invitation to Participate have been served, the RTM company can serve its formal Notice of Claim under Section 79 on the freeholder, any intermediate landlord, and any appointed management party.

The notice specifies the statutory date (at least three months following the deadline for the landlord's counter-notice) on which the RTM company intends to acquire management. Maintaining meticulous, timestamped records of member registers, title documentation, and served notices ensures that if the freeholder serves a counter-notice disputing eligibility, the RTM company can defend its claim decisively before the First-tier Tribunal (Property Chamber).

Common questions about Right to Manage (RTM) initial stages

Starting a Right to Manage (RTM) claim requires understanding key eligibility criteria for your building and successfully mobilising at least 50% of leaseholders to form a Resident Management Company (RMC).

What is Right to Manage (RTM) eligibility?

Right to Manage (RTM) eligibility refers to the legal criteria a building must meet for leaseholders to take over its management. Key requirements include the building having at least two flats with two-thirds held by qualifying leaseholders, and less than 25% commercial floor area. These rules ensure that RTM is primarily for residential blocks.

How do I mobilise leaseholders for a Right to Manage claim?

Mobilising leaseholders for an RTM claim involves clear communication and building consensus to get at least 50% of qualifying leaseholders on board. It requires articulating the benefits of RTM, addressing concerns about responsibility, and outlining how professional support can simplify management. Sharing evidence of potential savings and improved service can be highly effective.

What is a Resident Management Company (RMC) in the context of RTM?

A Resident Management Company (RMC), specifically an RTM Co, is a mandatory legal entity formed by leaseholders to exercise their Right to Manage. It must be a company limited by guarantee, with its primary purpose being to acquire and manage the building. Each participating leaseholder becomes a member, and the RTM Co serves all official notices.

What are the first steps to start a Right to Manage application?

The first steps to start an RTM application involve verifying your building's eligibility against the specific criteria outlined in the Leasehold Reform, Housing and Urban Development Act 1993. Following this, you must form a Right to Manage Company (RTM Co) and then work to mobilise at least 50% of the qualifying leaseholders to join this company.

How many leaseholders are needed for Right to Manage?

For a Right to Manage claim to be valid, at least 50% of the qualifying leaseholders in the building must formally agree to become members of the Right to Manage Company (RTM Co). This participation threshold is legally mandated to proceed with serving the initial notice to the landlord.

What if some leaseholders are buy-to-let landlords?

If some leaseholders are buy-to-let landlords, they are still qualifying leaseholders and their participation is counted towards the 50% threshold for an RTM claim. Engaging them might require demonstrating the financial benefits of improved management, such as better property maintenance and potentially higher rental yields, to gain their support.