RTM (right to manage) companies

A Right to Manage Company is for a very specific purpose.

The Commonhold and Leasehold Reform Act 2002 provides a right for leaseholders in England and Wales to take over the landlord's management functions by transferring them to a special company set up for the purpose, a Right To Manage (RTM) company. Such companies cannot be set up in Scotland or Northern Ireland. The right was introduced to empower leaseholders, who generally hold the majority of value in the property, to take responsibility for the management of their block. It applies only to leaseholders of flats, not of houses. The process is relatively simple. The landlord's consent is not required, nor is any order of court. The right is exercised by the service of a formal notice on the landlord. After a set period of time, the management transfers to the right to manage company (the RTM company) which has been set up by the leaseholders. Once the right to manage has been acquired, the landlord is also entitled to membership of the company.

We cannot advise about putting the process into effect, but we can set up the RTM Company. There are special regulations in the RTM Companies (Model Articles) (England) Regulations 2009 (and equivalent rules for Wales) as to the contents of the articles of association.

An RTM company must be distinguished from a property management company, which is used more generally where a property is divided into separate units (e.g. where a house is divided into several flats).

If you want to proceed to register a Right to Manage company, check that you have all the required information and register now.