Before anything else, you need to know which legal vehicle will manage your building. There are two common ones, and mixing them up is one of the most expensive early mistakes.
Resident Management Company (RMC)
An RMC is a company set up, usually when the building was developed, to take on the landlord’s management responsibilities. Leaseholders are normally its members. If your lease makes the RMC responsible for the building, it may already be the right vehicle and you do not need to form anything new. The question then becomes who the RMC appoints to run the building day to day, which can be its own directors.
Right to Manage (RTM) company
The Right to Manage is a statutory right under the Commonhold and Leasehold Reform Act 2002. Qualifying leaseholders can take over management of their building without proving any fault by the landlord or agent. They do it through an RTM company, formed for that purpose. It is only needed where there is no suitable RMC and leaseholders want to acquire management formally.
How the two compare
| RMC | RTM company | |
|---|---|---|
| Where it comes from | Your lease and title structure | A statutory right for qualifying buildings |
| Do you need a new company? | No, it usually already exists | Yes, an RTM company is formed |
| Landlord’s agreement | Not needed to use what the lease already provides | Not needed, but the landlord can challenge a claim |
| Typical timescale | Depends on the lease and the agent’s contract | A few months from the claim notice if uncontested |
| Who runs it | Its directors, often leaseholders | Its directors, normally resident leaseholders |
The basic tests for an RTM claim
The rules are detailed and have been reformed recently, so check the current position. In broad terms:
- the building must be self-contained, or capable of being, with at least two flats;
- at least two-thirds of the flats must be held by qualifying leaseholders (generally, those on long leases);
- the RTM company needs members who are leaseholders of at least half of the flats; and
- there are limits on how much of the building can be non-residential.
The RTM steps in outline
- Form the RTM company and appoint its first directors.
- Invite every qualifying leaseholder to participate, using the prescribed notice.
- Serve the claim notice on the landlord and any other relevant parties.
- Allow the landlord’s response period. If there is no valid counter-notice, the company takes over on the acquisition date.
- Agree the handover from the outgoing agent and begin managing.
Where we come in
Leasehold Clarity is the platform your directors use once the structure is settled. Murphy Thompson Moore LLP can help with the company secretarial side, such as forming the company, Companies House filings and officer changes. We do not give legal advice on the statutory notices. For those, use a solicitor experienced in leasehold law.
This guide is general information, not advice on your circumstances. Leasehold law is detailed and changes: check the current position and take advice before acting. Published October 2026.