How do we set up an RTM company and take over management of our block?

Last checked against the sources on 20 October 2026

Form a private company limited by guarantee whose articles say its object is to acquire and exercise the Right to Manage; invite every other qualifying leaseholder to join; then, at least 14 days later, serve a claim notice on the landlord once members include leaseholders of at least half the flats. If the landlord doesn’t dispute it, the company takes over on the date in the notice, which has to be at least four months after you serve it. The building must pass the Act’s tests first.

1. Check the building qualifies

Section 72 of the Commonhold and Leasehold Reform Act 2002 says the right applies to a self-contained building, or a self-contained part of one, that contains at least two flats held by qualifying tenants, where qualifying tenants hold at least two-thirds of the flats. A qualifying tenant is the tenant of a flat under a long lease, which in general means one granted for more than 21 years; a business tenancy doesn’t count, and each flat has only one qualifying tenant (sections 75 and 76).

Schedule 6 then excludes some buildings: where the non-residential parts are more than 50% of the internal floor area (this limit was raised to 50% on 3 March 2025), where different people own the freehold of different parts and one is a self-contained part, where there is a resident landlord and no more than four units in a building that wasn’t built as flats, where a council is the immediate landlord of any qualifying tenant, and where an RTM company has held the right in the last four years. Our free Right to Manage eligibility check walks through each of these.

2. Form the RTM company

The claim has to be made by an RTM company. Under section 73 that is a private company limited by guarantee whose articles state that its object, or one of its objects, is the acquisition and exercise of the right to manage the building. Section 74 says regulations set the content and form of the articles and that a company may adopt provisions of them; the Companies Act’s default model articles don’t apply to an RTM company. Only qualifying tenants of flats in the building can be members until the company acquires the right, and landlords under leases of the building may become members from then on.

We haven’t covered the practical steps of registering the company at Companies House here. Check that the articles you use are the RTM articles, not a general set.

3. Invite your neighbours to take part

Before making a claim, the company must give a notice of invitation to participate to each qualifying tenant who isn’t, and hasn’t agreed to become, a member (section 78). It must state that the company intends to acquire the right to manage the building, give the names of the members, invite the recipient to join, and either enclose a copy of the articles or say where they can be inspected and a copy ordered. A notice isn’t invalid because of an inaccuracy in the particulars it must contain.

4. Serve the claim notice

Wait at least 14 days after the last invitation was given (section 79(2)).
On the day you give it, the company’s members must include qualifying tenants of at least half the flats in the building. If there are only two qualifying tenants, both must be members (section 79(4) and (5)).
Give it to the landlord, anyone else party to a lease who isn’t landlord or tenant, and any manager appointed by a tribunal; give a copy to every qualifying tenant (section 79(6) and (8)).
It must set out the premises and why you say the Act applies; the name and flat address of each qualifying tenant who is a member, with identifying details of their lease; the company’s name and registered office; a date at least one month away for any counter-notice; and a date at least three months after that when the company intends to take over (section 80).

Regulations can also prescribe further particulars and the form of the notices, and we haven’t read them, so use a current prescribed form from LEASE or a solicitor, not a made-up one. The Act is forgiving about small mistakes (a claim notice isn’t invalid because of an inaccuracy in the particulars) but not about missing the basic tests.

5. What the landlord can do

The landlord can serve a counter-notice by the date in your notice, either admitting you’re entitled or alleging you aren’t and naming the provision (section 84). If no counter-notice is given, or each admits entitlement, the company takes over on the date in the claim notice (section 90). If someone disputes it, the company has two months from the counter-notice to apply to the tribunal for a determination, and doesn’t acquire the right unless the tribunal finally decides in its favour or the landlord agrees in writing. If the tribunal finds in your favour, the acquisition date is three months after that decision becomes final.

How long it takes

If nobody disputes it, the earliest the company can take over is a month plus three months after the claim notice is given, so at least four months, plus the 14 days between the invitations and the claim notice. A dispute adds the tribunal process on top.

Costs

Section 88 of the Act, which dealt with the costs of a claim, was removed on 3 March 2025 by the Leasehold and Freehold Reform Act 2024. We haven’t read what replaced it, so we can’t tell you here what costs the company may have to bear. Ask LEASE, which advises for free, before you spend money.

Where to get help

LEASE (the Leasehold Advisory Service) is government-sponsored and gives free independent advice on Right to Manage. GOV.UK has an official summary, and the Federation of Private Residents’ Associations offers advice and sample documents to its members. We don’t get paid by any of them.

This is general information, not legal advice.

How Tiny Freeholder helps

Tiny Freeholder starts after the company exists: it keeps the register of members, files the accounts and tax return, and runs Section 20 consultations, fire safety and the other building checks. It doesn’t form the company, write the invitation notices or serve the claim notice. Our free eligibility check at /right-to-manage-checker shows which of the Act’s tests a building meets.

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