Can Leaseholders Use the Right to Manage Without Buying the Freehold?

If you're a leaseholder wondering whether you can take control of your building without purchasing the freehold, the answer is often yes. The right to manage allows qualifying leaseholders in England to take over the management of their building without needing to buy the freehold or prove that the current landlord has done anything wrong. This legal right gives leaseholders greater control over how their building is managed, maintained, and financed.

What Is the Right to Manage?

The right to manage (RTM) is a legal process introduced under the Commonhold and Leasehold Reform Act 2002. It enables qualifying leaseholders to form a Right to Manage company and assume responsibility for managing the property.

Unlike collective enfranchisement, where leaseholders purchase the freehold, the right to manage only transfers the management responsibilities. The freeholder continues to own the building, but the RTM company becomes responsible for arranging maintenance, repairs, insurance, cleaning, and managing service charges.

Who Can Use the Right to Manage?

Not every building qualifies for RTM, but many residential blocks do. In general, the building must contain at least two flats, and a significant proportion of the flats must be owned by qualifying leaseholders. In addition, enough leaseholders must agree to participate before an RTM company can be established.

Before starting the process, leaseholders should check the eligibility requirements and seek professional guidance if they are unsure whether their building qualifies.

What Are the Benefits of the Right to Manage?

One of the biggest advantages of the right to manage is greater control over property management decisions. Leaseholders can appoint their preferred managing agent or even self-manage if they have the necessary experience.

Other benefits include:

• Better control over maintenance standards.

• Greater transparency in service charge spending.

• Faster responses to repair and maintenance issues.

• Improved communication between residents and property managers.

• The ability to choose contractors that provide better value for money.

These improvements often result in higher resident satisfaction and better long-term maintenance of the building.

Does the Freeholder Still Have Rights?

Yes. Although the RTM company takes over day-to-day management, the freeholder still owns the property and retains certain legal rights. For example, they may remain responsible for matters not transferred under RTM and are entitled to become a member of the RTM company in certain circumstances.

Understanding these ongoing responsibilities helps both leaseholders and freeholders maintain a positive working relationship after the management transfer.

Is Right to Manage Better Than Buying the Freehold?

The answer depends on your objectives. Buying the freehold provides complete ownership and greater long-term control, but it usually requires a substantial financial investment. In comparison, the right to manage offers many management benefits without the cost of purchasing the freehold.

For many leaseholders, RTM provides an effective way to improve building management while avoiding the complexity and expense of freehold acquisition.

Final Thoughts

The right to manage gives qualifying leaseholders an opportunity to take control of their building's management without buying the freehold. It can improve maintenance standards, increase transparency, and give residents a greater say in how their property is managed.

If you'd like to understand the eligibility rules, legal process, benefits, and responsibilities in more detail, read our comprehensive guide on Right to Manage. It explains everything UK leaseholders need to know before starting the RTM process.