One of the most anticipated aspects of The Leasehold and Freehold Reform Act 2024 is the overhaul of the RTM process, offering greater ease and efficiency for leaseholders seeking to take control of the management of their building. Now that the day is here let’s take a closer look at the RTM provisions in the Act and what they mean for leaseholders, freeholders, and property managers alike.
What is Right to Manage (RTM)?
The RTM is a right that allows leaseholders in residential buildings to take over the management of their building from the landlord or freeholder, without needing to buy the freehold. The aim is to give leaseholders more control over how their building is managed, including decisions on maintenance, repairs, and service charges.
Under the previous rules, the RTM process was complicated, time-consuming, and difficult to navigate, particularly when dealing with large or complex properties. The new provisions aim to simplify and streamline this process, offering leaseholders clearer pathways to manage their buildings effectively.
Key Changes in the RTM Provisions Under the Act
- Increase of Non-Residential Limit
RTM is now available for mixed use premises so long as the internal floor area for non-residential parts does not exceed 50% of the total internal floor area. The previous limit was 25% meaning that more buildings will now have access to RTM.
- Costs
Leaseholders are no longer required to cover the legal fees of their freeholder when making an RTM claim. - Increased Transparency and Accountability
In addition to benefiting leaseholders, the Act also aims to increase accountability on the part of freeholders. For example, if a freeholder refuses to cooperate with an RTM claim or delays the process unfairly, the new legislation gives leaseholders a clearer route to challenge such behaviour, including the possibility of bringing claims to the First-tier Tribunal for compensation.
What Next?
The Leasehold and Freehold Reform Act 2024 represents a landmark shift in leaseholder rights, and the new RTM provisions will make it easier for leaseholders to take control of their buildings. As these changes are now in force leaseholders, freeholders, and property managers will need to familiarise themselves with the new rules.
For leaseholders, this is a time of opportunity. For freeholders, it’s a time of adjustment. Regardless, the aim of the new provisions is clear: to create a more balanced and fair system that gives leaseholders the tools they need to manage their homes effectively.
And a final note…
This change is not to be confused with the White Paper on Commonhold published today (somewhat confusingly). We’ve written an additional blog on that proposed piece of legislation here, but it could still be four years away. Meanwhile the Right to Manage legislation, discussed above comes into force today.
It’s a busy time for leasehold. If you need any information, or advice, please contact Katie Miller on 01756 692884 or by email: katie.miller@awbclaw.co.uk. We’d be happy to help.
Further Reading:
Leasehold and Freehold Reform Act 2024
RICS Welcomes Progress on Leasehold Reform
Should you extend your lease now? Or wait for the Leasehold Reforms?
What is Commonhold? And what does it mean for Leasehold?
3 March 2025