What is the Right to Manage, and how do we use it?
A statutory route for leaseholders to take over the management of their building without buying anything and without having to prove the landlord has done anything wrong.
- Difficulty
- advanced
- Time
- 14 min
- Read
- 5 min
Short answer
Qualifying leaseholders in a qualifying building can form a Right to Manage company, serve notice, and take over management of the building — repairs, maintenance, insurance and the service charge — from the landlord or their agent. No fault has to be shown and nothing is bought. The lease terms, the ground rent and the lease length are unaffected.
Right to Manage exists because the common complaint about leasehold is not the tenure itself but the management: a service charge that rises without explanation, repairs that do not happen, and a managing agent accountable to a freeholder rather than to the people paying. It is deliberately a no-fault right, which means the argument is about whether the building and the participants qualify, not about whether the landlord has behaved badly.
Step by step
- Check the building qualifies.It must be a self-contained building or part of one, containing at least two flats, with at least two-thirds of the flats held by qualifying leaseholders on long leases, and non-residential parts within the permitted proportion of the floor area. Some buildings are excluded.
- Count the participants.Leaseholders of at least half the flats must be members of the Right to Manage company when notice is given. In a two-flat building both must join.
- Form the company properly.A Right to Manage company is a specific type of company limited by guarantee with prescribed articles. Using the prescribed form matters — an incorrectly constituted company is a common reason a claim fails.
- Invite every qualifying leaseholder to participate.A notice inviting participation must be given to all qualifying leaseholders who are not already members, with a minimum period before the claim notice. Skipping it invalidates the claim.
- Serve the claim notice.The claim notice goes to the landlord and to any management company named in the leases, and specifies the acquisition date. The landlord can serve a counter-notice disputing entitlement, in which case the First-tier Tribunal decides.
- Expect to pay the landlord's reasonable costs.The company is generally liable for the landlord's reasonable costs of dealing with the claim, whether or not it succeeds. That is a real budget item and a reason to get the notices right first time.
- Plan the handover.On the acquisition date the landlord must hand over the accounts, the service charge funds and the contracts, and management transfers. Get a professional to check what is handed over — undisclosed contracts and missing reserve funds are the usual disputes.
- Understand what you take on.Repairs and maintenance of the structure and common parts, insurance where the lease provides, the service charge and its accounting, statutory consultation for major works and long-term agreements, health and safety, and building safety duties where they apply.
- Understand what you do not get.The freehold, the ground rent, the lease length, and the right to change the lease terms. Rights of forfeiture and approvals reserved to the landlord in the lease may remain with them, though some pass to the company. Ask the solicitor which.
- Decide about a managing agent early.Most Right to Manage companies employ one. The difference is that they are now accountable to you and can be replaced. Choose one who is a member of a recognised professional body and who does blocks of your size.
- Take the company seriously afterwards.Directors have real duties, the company has to file accounts, and service charge money is held on trust. Groups that treat it as an informal arrangement create problems for whoever sells first.
Tips
- Get the notices drafted by a solicitor who does Right to Manage work. The right is straightforward; the procedure is where claims die.
- Budget for the landlord's reasonable costs from the start, because they are payable whether or not the claim succeeds.
- Audit what is handed over on the acquisition date, especially the reserve fund and any long-term contracts.
Common mistakes
- Using an ordinary company rather than the prescribed form — A Right to Manage company must be constituted in the prescribed way. Getting it wrong invalidates the claim and the landlord's costs are still payable.
- Skipping the notice inviting participation — It is a statutory step and omitting it is one of the most common reasons a claim fails on a technicality.
If it doesn't work
The landlord served a counter-notice disputing entitlement
Cause: A qualification point, or a defect in the notices — Fix: The company must apply to the First-tier Tribunal within a strict period. Get the solicitor onto it immediately — the deadline is the thing that ends claims, not the merits.
Service charge funds were not handed over
Cause: A dispute about what is owed on the acquisition date — Fix: The landlord must hand over accrued service charge funds. Where they do not, the tribunal can determine it. Get the accounts audited on handover so the figure is fixed.
Not enough leaseholders will join
Cause: Apathy rather than opposition, usually — Fix: Hold a meeting and set out the actual costs and what would change. Most non-participation is people not understanding that it costs them nothing to be a member.
Questions people ask
Do we have to prove the landlord has been bad?
No, and that is the point of the right. Entitlement turns on the building and the participants qualifying, not on the landlord's conduct.
Does it reduce the service charge?
Not automatically. It gives control of what is spent and on what, and it makes the manager accountable to leaseholders. Some blocks save money; others spend the same amount on work that was previously not being done.
Can the landlord get management back?
There are limited circumstances in which the right can cease, and the company can also give it up. In practice it is treated as a permanent change.
Should we do this or buy the freehold?
Right to Manage solves management and costs less. Enfranchisement solves management, lease length and ground rent, and costs more. Many groups do the first and consider the second later.
Does it apply outside England and Wales?
No. It is a creature of England and Wales leasehold legislation.