Significant Reforms to Right to Manage (RTM) Criteria Effective 3rd March 2025
The government is introducing major updates to the Leasehold and Freehold Reform Act 2024, with the first of these reforms taking effect on 3rd March 2025. These updates aim to expand the Right to Manage (RTM) framework, making it easier for more leaseholders to take control of their building’s management. These RTM updates form part of a broader set of leasehold reforms, which also include extended lease terms, cost reductions, and increased transparency for leaseholders.
Key Changes to RTM Criteria:
- Increased Non-Residential Limit: The permissible non-residential floor space within a building qualifying for RTM has been expanded from 25% to 50%. This adjustment enables leaseholders in mixed-use developments, where commercial spaces constitute up to half of the building's area, to qualify RTM.
- Elimination of Landlord's Legal Costs for Leaseholders: Previously, leaseholders had to pay their landlord’s legal expenses when initiating an RTM claim. Under the new law, this requirement has been abolished, reducing the financial burden on leaseholders seeking to manage their buildings. Additionally, leaseholders now have the right to apply to recover their own legal costs in disputes, strengthening their legal position.
Implications for Leaseholders and Property Managers:
These reforms make Right to Manage (RTM) more accessible, particularly for leaseholders in mixed-use buildings, who were previously ineligible. Removing the requirement to cover landlords' legal costs also takes away a significant financial hurdle, making the path to self-management more achievable.
However, while these changes simplify eligibility, the RTM process itself remains structured and requires careful navigation. Leaseholders will still need to:
- Form an RTM company
- Follow strict legal procedures
- Manage governance and responsibilities effectively.
For those considering RTM, understanding what’s involved is key to making an informed decision.
If you're thinking about RTM and want to explore your options, Innovus can provide independent, professional support for leaseholders at every stage of the process.
Find out more about how we support leaseholders on their RTM journey here or get in touch with our team.
