Right to manage

What is the right to manage?

The right to manage (RTM) is a legal right that allows tenants of a multi-unit building, such as a block of flats, to collectively take over the management of the building from the landlord. This includes responsibilities such as maintenance, repairs, insurance, and even appointment of managing agents. To exercise the RTM, a qualifying tenants’ association must give notice to the landlord, who then has a limited period of time to object.

The notice must be served by at least 50% of the tenants who will be included in the RTM company and must have been the tenants of the building for at least two years. If the landlord does not object or the objections are overcome, the tenants’ association can then take control of the management of the building. RTM was introduced by the Commonhold and Leasehold Reform Act 2002 to help leasehold tenants have more control over their homes and improve the management of their buildings. It is important to note that RTM does not transfer ownership of the building to the tenants but only to the management of the building.

Laws of right to manage

The right to manage (RTM) is governed by the Commonhold and Leasehold Reform Act 2002 in the United Kingdom. HBR’s research on managing organizations highlights that collective governance frameworks succeed when participants have clearly defined roles. The act provides the legal framework for tenants of a multi-unit building to take over the management of the building from the landlord. The act lays out the qualifications and procedures that a tenants’ association must meet to exercise the RTM, including:

• The building must be self-contained or part of a building occupied by at least two or more households.
• The tenants’ association must be made up of at least 50% of the tenants who will be included in the RTM company, and they must have been the tenants of the building for at least two years.
• The tenants’ association must give notice to the landlord, who then has a limited period of time to object.
• If the landlord does not object or the objections are overcome, the tenants’ association can then take control of the management of the building.

The act also provides for the formation of a company to manage the building, known as an RTM company. It lays out the RTM company’s responsibilities and powers, including the building’s management, the power to raise money, and the power to enter into contracts. It is important to note that the RTM company must follow the regulations and rules of the company law and the building’s leasehold agreements. Sound decision-making practices and transparent governance are essential. If they fail to do so, they could be held liable by the landlord or other tenants.

HR professionals in organizations that occupy multi-unit commercial spaces should understand RTM, as it can affect workplace conditions, maintenance costs, and facilities budgets. Effective facilities management often involves a structured hiring plan for property managers and maintenance staff. Organizations that maintain quality workplaces find it easier to attract top talent, supported by strong talent acquisition strategies. Using skills-based assessments when hiring facilities staff ensures the right competencies, and a pre-employment assessment platform streamlines this process.

Frequently asked questions