Call for Assistance: 02033 259 341
Spondoo Accounting
Call for Assistance: 02033 259 341
Spondoo Accounting

Right to Management (RTM) Specialist Accountants

September 5, 2022

Spondoo has a team of accountants specialising in the property industry. Our team is highly skilled with landlord tax returns and Right to Manage (RTM) obligations. 

What is Right to Management (RTM) 

Right To Manage (RTM) is a legislation that gives leaseholders (tenants) the right to take over the management responsibility of the building from the freeholder (landlord) by setting up an RTM company. The legislation is only applicable to leaseholders of flats (not houses). 

Leaseholders do not need the landlord’s approval or a court order to exercise this right. Ideally, RTM follows the following process: 

  • Deciding on who will become the first company supporters,  directors and secretary. 
  • Setting up the RTM company 
  • Inviting other non-members to participate by serving s. 78 Notices. 
  • Serve the landlord with s.79 “Notice of Claim” when you achieve the membership thresholds. 
  • Take over the management duties from the landlord. 


What is a Right to Management company – and how does it work? 

A Right to Manage (RTM) company is a limited by guarantee LTD set up by individual residential unit leaseholders who want to take over the management of the whole building from the landlord. Essentially, RTM is exercised by the company and not the individual leaseholders. The company must: 

  • Obtain the right to manage. 
  • Take responsibility for the management duties of the building. 

Services and duties covered under RTM 

The RTM company management duties may include: 

  • Handle the building’s insurance. 
  • Collect and levy all the service charges. 
  • Regular upkeep and decoration of communal areas like the stairs, elevators, communal hallways and exteriors etc. You should also work on keeping them clean. 
  • Upkeep and maintenance of the entire structure of the property 
  • Properly handle every complaint about the building from the freeholder, other leaseholders, and neighboring properties 
  • Perform fire risk assessments and put in place safety measures 
  • Work on maintaining the building’s structure. 
  • Handle cleaning, collecting, concierge, and security services 
  • Handle any tenant who put a negative impact on the building or the residents. 

Eligibility of Right to Manage company formation 

To qualify for Right to Manage, you must meet the following conditions: 

Building conditions: 

  • It must contain a minimum of two flats. 
  • More than two-thirds of the flats within the building must be leasehold. 
  • At least two-thirds of the flats must be let to qualifying tenants. Qualifying tenants have leases that were originally granted more than 21 years. 
  • More than 75% of the building (excluding common areas like stairs, halls, common areas & car parks) must be residential. 
  • If the building is not a purpose-built block of flats and contains four or fewer flats, the landlord (or an adult member of their family) must not have permanently resided in one of the flats for at least 12 months. 
  • The building must be self-contained. However, if it forms part of bigger structure, it should be able to be developed independently. 

For the RTM company to take over management, more than 50% of the qualifying tenants in the building must want to exercise the right to manage and must become members of the right to manage company. 

What Information do I need to set up the company? 

To set up an RTM company, you must have the following documents: 

  • UpToDate survey copies 
  • Registered addresses for the freeholders, leaseholders, and landlords. 
  • The Insurance of the building 
  • Information on the commercial or non-residential use within the building 
  • Current management arrangements 
  • The condition of the building 
  • Services to/for the building 
  • Current contracts and maintenance commitments 

How can Spondoo Accountants help? 

We can help you with: 

Setting up your limited company

You cannot exercise RTM without setting up an RTM company first. The company must also meet the following conditions: 

  • Be limited by Guarantee. 
  • Have prescribed memorandum and article of association. 
  • The company name should end with the words ‘RTM company limited.’ 

 Our team can help you set up your RTM limited company with Companies House – in the right way. 

Finding the best accounting software  

We can help you find the best user-friendly accounting system for maintaining and keeping records of your accounting transactions. 

Tax and accounting for Income that attracts tax obligation

Any income that the company gets apart from service charges will attract a Corporation tax liability. It may come from activities like renting out parking spaces or issuing laundry tokens. We can help you declare it on the Corporation Tax return and properly account for it. We will also help you in submitting your: 

  • Confirmation Statements 
  • Annual Accounts 
  • Director’s self-Assessment return 

Tax advisory services 

We can help you avoid mistakes that may attract penalties and interest charges by advising you on the best limited company tax and HMRC compliance practices. 

Here is a full list of all our services and specialist services. 

Contact property accountants and tax advisors now! 

We are a leading UK accounting firm providing specialist property and the Right to Management accounting, bookkeeping, advisory and compliance services. Please call us at 02033 259 341 or e-mail for support. 


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Information provided on the site is merely guidance that may change in line with UK law and regulations. Users must not consider this to be financial advice or their sole resource when making any financial decision. Spondoo is a trading name for Accounting SQL Limited, authorised & license accounting firm under the Institute of Financial Accountants.
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