In short
Under the Commonhold and Leasehold Reform Act 2002, qualifying leaseholders form an RTM company, invite the others to join, serve a claim notice on the landlord and, if the claim is not successfully challenged, take over management on the acquisition date. The RTM company then appoints its own managing agent. Since 3 March 2025, buildings with up to 50% non-residential floor space can qualify, and in most cases each side bears its own costs.
What RTM is
RTM transfers the landlord's management functions under the leases, such as repairs, insurance, services and service charges, to a company owned by the leaseholders. The freeholder keeps ownership of the building and the ground rent. It is a "no-fault" right: you do not need to show the landlord has managed badly.
Does your building qualify?
| Self-contained building | The building, or a self-contained part of it, must be structurally detached or capable of independent redevelopment. |
|---|---|
| At least two flats | Held by qualifying tenants, generally leaseholders with long leases of more than 21 years. |
| Two-thirds rule | At least two-thirds of the flats must be held by qualifying tenants. |
| Non-residential limit | No more than 50% of the internal floor area (excluding common parts) can be non-residential. This was raised from 25% on 3 March 2025. |
| Participation | When the claim is made, the RTM company's members must include qualifying tenants of at least half of the flats. |
There are exceptions, for example some buildings where the landlord is a resident landlord in a small conversion, or where the freeholder is a local authority. We check the detail before anyone spends money.
The RTM process
- FeasibilityConfirm the building qualifies, count qualifying tenants and gauge interest.
- Form the RTM companyA private company limited by guarantee, using the prescribed model articles, registered at Companies House.
- Notice inviting participationServed on every qualifying tenant who is not yet a member, at least 14 days before the claim notice.
- Claim noticeServed on the landlord and any other relevant parties, stating a date for a counter-notice (at least one month away) and an acquisition date (at least three months after that).
- Counter-noticeThe landlord either accepts the claim or disputes it. A disputed claim is decided by the First-tier Tribunal (Property Chamber).
- Handover and acquisition dateContractor contracts, uncommitted service charge funds and records transfer to the RTM company, which takes over management from the acquisition date.
Costs after the 2025 changes
Before March 2025, the RTM company had to pay the landlord's reasonable costs of dealing with the claim. Under the Leasehold and Freehold Reform Act 2024, each party now generally bears its own costs, with limited exceptions, and landlords cannot recover their non-litigation costs of an RTM claim through the service charge. The First-tier Tribunal is now the forum for disputes about compliance with RTM obligations.
After the acquisition date
The RTM company becomes responsible for managing the building in line with the leases. That means budgets, service charges, insurance, repairs, compliance and consultation, plus the company's own Companies House obligations. Most RTM companies appoint a managing agent to do the day-to-day work while the directors make the decisions.
How EKIN helps
We work alongside the leaseholders' solicitor, who forms the RTM company and deals with the legal notices. We focus on the practical side:
- A feasibility review and a clear explanation for leaseholders of what RTM will mean in practice.
- Collecting information on the building, current contracts and compliance before the acquisition date.
- Planning the handover so funds, contracts, insurance and records transfer on day one.
- Managing the building from the acquisition date and supporting the RTM company's directors with meetings, minutes and decision papers.
Frequently asked questions
Do we need a solicitor for an RTM claim?
It is strongly recommended. The notices must be served correctly and in the prescribed form, and errors can invalidate the claim. We work alongside your solicitor on the practical and management side.
Does RTM mean we own the building?
No. RTM transfers management, not ownership. Buying the freehold is a separate process called collective enfranchisement.
Can the landlord stop us?
A landlord can dispute a claim only on the grounds that it does not meet the statutory requirements, for example that the building does not qualify. It cannot refuse because it would rather keep management.
How long does RTM take?
From forming the company to the acquisition date is typically four to six months, longer if the claim is disputed at the tribunal.
Last reviewed 2026-09-23 against the sources listed. This page is general information about England and is not legal advice; the lease for your building always comes first.
Sources: Commonhold and Leasehold Reform Act 2002, Part 2 Chapter 1; Leasehold and Freehold Reform Act 2024 (Commencement No. 3) Regulations 2025.