Right to Manage

If an RTM claim is successful, the leaseholders take over management through a specially formed Right to Manage Company. The freeholder continues to own the building, but responsibility for services, repairs, maintenance and insurance transfers to the RTM Company.

In this guidance, when we say 'leaseholders” we mean qualifying tenants who may be eligible to take part in a Right to Manage claim. This can include 100% leaseholders and shared owners, where they meet the legal requirements. 

What responsibilities transfer under Right to Manage?

Once Right to Manage (RTM) is acquired, the RTM Company typically becomes responsible for meeting the landlord’s responsibilities as set out in the lease, including but not limited to: 

• Arranging building maintenance and repairs 
• Managing communal areas 
• Procuring buildings insurance 
• Appointing and managing contractors 
• Managing service charge budgets and expenditure 
• Undertaking statutory compliance activities relating to the building 
• Responding to leaseholder enquiries about management matters

The freeholder retains ownership of the building and the leases remain unchanged. 

Does my building qualify?

The eligibility rules are set out in legislation, but a building will generally qualify if:

• It contains at least two flats 
• At least two-thirds of the flats are held on long leases 
• At least 50% of qualifying leaseholders participate in the claim 
• The building is self-contained
• The non-residential element does not exceed the statutory limit (at least 50% of the building floor space is made up of residential premises)

Eligibility can be complex and leaseholders should always obtain independent legal advice before commencing an RTM claim. 

What does Right to Manage mean for Sage Homes?

Where Sage Homes is the landlord of an eligible building, leaseholders have the legal right to pursue RTM if they meet the statutory requirements. If a valid RTM claim is made, Sage Homes will: 

• Review the claim in accordance with the statutory process 
• Provide information required by legislation 
• Work constructively to support an orderly management handover where RTM is successfully acquired 
• Continue to fulfil any obligations which remain with the landlord following transfer

Sage Homes cannot provide legal advice to leaseholders considering RTM and recommends that independent professional advice is obtained.

Things to consider before pursuing Right to Manage

Taking over management can provide leaseholders with greater control over decisions affecting their building. However, it also brings significant responsibilities. Before proceeding, leaseholders should consider: 

• Whether sufficient residents are willing to become directors of the RTM Company 
• The skills and resources required to manage a residential building 
• Ongoing compliance obligations, including health and safety requirements
• The cost of appointing professional managing agents and advisers 
• Responsibility for budget setting, service charges and major works planning

RTM gives leaseholders control over management decisions, but it does not remove the need to comply with lease obligations and legal requirements.

The Right to Manage Process 

The process generally involves: 

• Forming and registering a Right to Manage Company. 
• Inviting other qualifying leaseholders to participate. 
• Serving formal statutory notices. 
• Receiving any response from the landlord. 
• Transferring management responsibilities on the acquisition date. 

The statutory process contains strict legal requirements and timescales. Leaseholders should seek independent legal advice before serving notices.

Who to contact

If you are considering Right to Manage and need information from Sage Homes about your building, please contact: homeownershipservices@sagehomes.co.uk. 

Further information

For independent guidance on Right to Manage, leaseholders may wish to visit: 

• Leasehold Advisory Service (LEASE)
• GOV.UK Right to Manage guidance
• Citizens Advice 

Sage Homes recommends that leaseholders considering Right to Manage obtain independent legal and professional advice before commencing a claim.