The Commonhold and Leasehold Reform Act (2002) introduced the Right to Manage (RTM) Act, which allows leaseholders in an apartment building to form a RTM company to take over responsibility for carrying out or arranging the management of their block.
RTM allows leaseholders to choose the manager of their block of flats, without the need to collectively purchase the freehold. It also allows leaseholders to replace managing agents they are unhappy with.
The following factors need to be met for RTM to be applicable:
- A qualifying tenant (also known as a qualifying leaseholder) for the purposes of RTM is someone who holds a lease that was originally granted for more than 21 years. There can only be one qualifying tenant per flat.
- Premises that consist of a self-contained building.
- The building contains two or more flats held by qualifying tenants.
- The total number of flats held by qualifying tenants is not less than two-thirds of the total number of flats in the premises.
- The RTM Company must include at least 50% of the qualifying tenants of flats contained in the premises that the RTM applies to.