The Commonhold and Leasehold Reform Act 2002 (CLRA) sets the criteria for leaseholders to be able to apply for the Right To Manage as:

• The self-contained building must contain at least two flats (does not apply to houses).

• At least two thirds of the flats must be owned by long leases exceeding 21 years.

• Any commercial parts cannot exceed 25% of the total floor area (ignoring common parts).

• You must have the support of at least 50% of all the leaseholders.

• There are other restrictions if the freeholder is a resident, or the immediate Landlord is a housing association.​​​

The first step is to create a Limited company. This must be an RTM company formally registered with Companies House, and it must adopt the prescribed (standard) Articles of Association. The Articles are the key document setting out the aims, governance and actions of the company.

This RTM company can be formed by any number of leaseholders as the first step - it is the vehicle which will collect other leaseholders and apply for RTM.

Once you have a company in place, you must then send a notice to invite all leaseholders to participate. You cannot exclude anyone. The Landlord is also entitled to become and member and must be invited. 

There is a prescribed format for the Notice Inviting Participation which makes it easier for leaseholder to arrange themselves, but it is vital that it is completed correctly and must include required details. You may benefit from professional support with this step.

You have your company and you have sufficient leaseholders who joined as members to proceed. Before the next step, it is important to pause and gather some information. Some of this is essential to be able to issue the Notice of Claim (next step), but an often overlooked step is to undertake some background work to ensure the RTM is as well informed as it can be. You are likely to want details of any existing service contracts in place, financial information (both funds available and any outstanding arrears), insurance details (policies and claims) as well as the state of the building and any planned works.

It would also be prudent for the RTM to draft an anticipated annual budget, to ensure they have considered all the costs involved, and to understand the likely impact of the new RTM on the leaseholders finance. Often a longer term Planned Maintenance Programme can help, though for larger buildings it is likely the Landlord or manager will already have one you could request.​

The next step is to issue the Notice of Claim if; 

• your building complies with the requirements

• the new company meets statutory requirements

• you have at least 50% of leaseholders as members of the company

• you have waited at least 14 days after the Notice Inviting Participation 

The form of this notice is also prescribed, and must be sent to various parties to the lease, including the Landlord, any manager under the lease, and a copy to all the leaseholders. 

After issuing the Notice of Claim, the RTM has the right to inspect the premises and areas that leaseholders would not ordinarily have access to. This can be beneficial for a range of services, especially lift motor rooms, loft spaces and electrical installations, as well as any communal heating systems.

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The Landlord also has the opportunity to issue a counter-notice, which will either agree and admit that the RTM has the right to claim, or allege reasons why it does not. The Landlord cannot simply object, so invariably the reasons will relate either to the property / leaseholders not qualifying in the first place, or to incorrect process being followed during the application.

Bearing in mind most counter-notices refer to incorrect process, there is a substantial benefit in having a professional undertake this for you.

The RTM will formally take on management from the acquisition date specified in the Notice of Claim. From this date, the RTM becomes responsible for management of the building, dealing with leaseholders, and of course protecting the assets of leaseholders as well as the Landlord (the building itself). This places significant responsibility on the leaseholders within the RTM company and should not be taken lightly - acquiring the Right To Manage really is just the beginning. But it can also be a liberating, money saving and stress reducing step to protect your leasehold investment.

Right To Manage is generally an excellent step for any qualifying leaseholders - there is no requirement to self-manage, so you can easily continue with the existing managing agent, but at least the leaseholders will be the ones making the key decisions. As always though, it often boils down to costs...

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The RTM will be responsible for the Landlord's reasonable costs in connection with the RTM. This is often in the region of £400 - £900, and potentially a further £20 - £50 per flat. If the Landlord disputes the claim, they will also likely incur legal fees in connection with the Tribunal application, perhaps £1,000 - £2,500. Professional fees to assist an RTM setup can be anything from £25 - £75 per flat.

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From start to finish, and assuming no unreasonable delays (such as securing supporting leaseholders) the whole process can take 4-6 months, but if disputed an application to Tribunal could easily take a further 6 months to resolve.