What do RTM company directors do?

Before acquisition, RTM company directors coordinate the legal process — organising notices, keeping membership records, appointing solicitors, and managing communications with leaseholders and the freeholder. After acquisition, directors make ongoing decisions on behalf of the company: instructing the managing agent, approving service charge budgets, overseeing major works decisions, reviewing the management contract, and representing the interests of all leaseholders.

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What Is a Right to Manage Company?

Published by Leaseholder Led · Independent guide — 5 May 2026

The short answer

A Right to Manage company is the company leaseholders form to claim and exercise their statutory right to manage their building. It is controlled by participating leaseholders, registered at Companies House with prescribed articles, and becomes responsible for appointing and instructing the managing agent once RTM takes effect. The company is the vehicle for the claim — but its ongoing role after acquisition is equally important.

Why you need a company to exercise Right to Manage

Right to Manage is a collective statutory right. Individual leaseholders cannot exercise it alone. The law requires leaseholders to act through a formal company — a body that can serve legal notices, hold memberships, enter contracts, and take over management functions. That company is the RTM company.

The requirement for a company is not bureaucracy for its own sake. It creates a clear legal entity that can be held to account, that has directors with defined responsibilities, and that the freeholder, outgoing managing agent, and incoming managing agent can all deal with directly. Without a company, the RTM process has no formal standing.

Once the claim succeeds, the RTM company does not usually manage the building itself day to day. Most RTM companies appoint a professional managing agent to handle operations. The important change is that the company — controlled by leaseholders — becomes the agent's client and decision-maker, replacing the freeholder in that role.

Before going down the RTM route, it is worth checking whether your building already has a company through which leaseholders can act. Some buildings can change managing agent without a new RTM claim.

Check your building's route

How an RTM company is set up

An RTM company is a company limited by guarantee registered at Companies House. The registration process is the same as for any limited by guarantee company, but the articles of association must be in the form prescribed by the Commonhold and Leasehold Reform Act 2002 (and subsequent regulations). Using the wrong articles is a common and serious mistake — it can invalidate the claim entirely.

The company's name must end with “RTM Company Limited.” It typically includes the building address or name to make clear which property it relates to.

At least one initial director must be a qualifying leaseholder in the building. Most RTM companies are set up with two or three directors drawn from the most engaged members of the leaseholder group.

Who can be a member?

Qualifying leaseholders — those who hold long leases of flats in the building — are eligible to join the RTM company as members. Each flat has one vote regardless of whether it is jointly owned by more than one person.

Before the claim notice is served, the RTM company must formally invite every qualifying leaseholder who is not already a member to join. This is done through a statutory participation notice. The company then needs at least 50% of qualifying leaseholders to be members when the claim notice is served.

Leaseholders who do not join at the start can still join later, but any leaseholder who joins after the claim notice has been served does not count toward the participation threshold for that claim.

The freeholder's membership

The freeholder is entitled to be a member of the RTM company. This is sometimes surprising to leaseholders, but the freeholder's membership does not give them management control — they are simply a member with the same general rights as any member. The RTM company's directors, appointed by the leaseholder members, make management decisions.

What directors do before acquisition

In the period between forming the company and the acquisition date, directors have a busy set of practical responsibilities:

•Identifying all qualifying leaseholders and maintaining an accurate membership register
•Serving the participation notices correctly and in time
•Working with solicitors to prepare the claim notice
•Communicating with leaseholders throughout the process
•Responding to any counter-notice from the freeholder
•Beginning the process of selecting a new managing agent ahead of the acquisition date

What directors do after acquisition

After the acquisition date, RTM company directors take on an ongoing management oversight role. This is not as demanding as running a building directly, but it does require engagement:

•Instructing and reviewing the managing agent's performance
•Approving service charge budgets and accounts
•Making decisions on major works and repairs above the managing agent's authority
•Maintaining company filings at Companies House (annual confirmation statement)
•Communicating with leaseholder members on building matters
•Making the decision to replace the managing agent if standards fall

Directors do not need to be property experts. They do need to be organised, willing to make decisions, and committed to representing the building's interests. The managing agent handles day-to-day operations; the RTM company holds the agent to account.

RTM company vs Residents' Management Company: what is the difference?

These two terms are often confused. The key differences are:

Company type	How it arises	Who controls it?
RTM company	Created by leaseholders to exercise the statutory Right to Manage.	Leaseholder members and their directors.
Residents' Management Company (RMC)	Usually created when the building was developed. Named in the lease or transfer documents.	Depends on the articles and lease — may be leaseholders, developer, or freeholder-appointed directors.

If leaseholders already control a Residents' Management Company that has the power to appoint the managing agent, they may not need an RTM company at all. The RTM process is typically necessary where a freeholder controls management and leaseholders have no direct power to change agent. For more detail, see our guide on what a Residents' Management Company is.

What does the RTM company not cover?

It is important to understand the boundaries of what transfers to the RTM company:

•The freehold does not transfer. RTM gives leaseholders management control, not ownership of the freehold interest. The freeholder retains their ownership.
•Estate-wide services may not be included. If the building is part of a larger estate and some services are managed estate-wide, those may not fall within the RTM company's scope.
•The freeholder retains certain consents. Some decisions still require freeholder consent under the lease — for example, alterations, subletting, and certain major works approvals.

Whether you need an RTM company, already have one, or have a simpler route to change agent depends on your building's legal structure. We can check and tell you the fastest practical route.

Find the fastest route for your building

Common questions

What is a Right to Manage company?

A Right to Manage company is a company limited by guarantee that leaseholders form specifically to claim and exercise the statutory Right to Manage their building. It must use prescribed articles of association under the Commonhold and Leasehold Reform Act 2002 and its name must end with “RTM Company Limited.” Once the claim succeeds, the company becomes the legal body responsible for appointing and instructing the managing agent.

Who can be a member of an RTM company?

Qualifying leaseholders in the building can be members of the RTM company. A qualifying leaseholder is someone who holds a long lease (originally granted for more than 21 years) of a flat in the building. Each flat has one vote regardless of how many people hold the lease jointly. The RTM company must invite all qualifying leaseholders who are not already members before it serves the claim notice.

Does an RTM company manage the building itself?

Not usually. In most cases, the RTM company appoints a professional managing agent to handle day-to-day management. The RTM company's role is to act as the client — setting expectations, approving budgets, reviewing performance, and replacing the agent if needed. The shift is that the leaseholder-controlled company becomes the decision-maker, not the freeholder.

Can the freeholder be a member of the RTM company?

Yes. The freeholder is entitled to be a member of the RTM company, even after the claim succeeds. However, the freeholder's membership does not give them control over management decisions — those decisions are made by the leaseholder members and their directors.

What is the difference between an RTM company and a Residents' Management Company?

An RTM company is created specifically by leaseholders exercising the statutory Right to Manage. A Residents' Management Company (RMC) is a company that was usually set up when the building was developed and is named in the lease or transfer documents as the management body. If leaseholders control the RMC, they may already have the power to change managing agent without needing to go through the RTM process at all.

Related guides

•What Is Right to Manage and Do I Need It? — eligibility, costs and whether RTM is the right route for your building
•The Right to Manage Process: Step-by-Step Guide — the full process from eligibility check to handover
•What Is a Residents' Management Company? — RMCs, ManCos and who controls management decisions
•Can I Change My Managing Agent Without Right to Manage? — the faster route where it exists

This guide is for general information only and does not constitute legal advice. For advice specific to your lease and building, consult a solicitor specialising in leasehold property.