Right to Manage and Commonhold: Options for UK Flat Owners
If you own a leasehold flat in England, you do not always have to accept the way your building is run. Two routes can give owners more control: the Right to Manage, and commonhold, a different form of ownership.
This Banke UK guide explains what each one is, who it suits, and what an overseas buyer or investor should ask before buying a flat where either is in play.
The Short Answer
Right to Manage (RTM) lets the leaseholders in a building take over the management functions from the landlord or managing agent without buying the freehold. Commonhold is a way of owning a flat outright, with owners collectively running the building through a commonhold association, with no lease and no ground rent. RTM is established and used in practice. Commonhold has existed in law for many years but is rare, and the law has been the subject of reform, so check the current position before relying on it.
Right to Manage in Plain Terms
RTM was created by the Commonhold and Leasehold Reform Act 2002. Leaseholders form a company, give notice, and if the conditions are met the company takes over management duties such as arranging repairs, insurance and service charge spending. The landlord still owns the freehold. Eligibility depends on factors such as the type of building and the proportion of flats owned by qualifying leaseholders, and a minimum share of those leaseholders must take part in the company. Check the current rules on GOV.UK or with the Leasehold Advisory Service (LEASE) before you plan one.
RTM does not change your lease terms, your ground rent or the length of your lease. For those, see Leasehold reform and our guide to short leases.
Commonhold in Plain Terms
In commonhold, each owner holds their flat as a freehold unit and the owners together own and manage the shared parts through a commonhold association. There is no landlord and no lease to run down. It is much less common than leasehold, so lenders, surveyors and conveyancers may have less experience with it. Ask your solicitor and your lender in writing how they treat a commonhold flat.
What It Means for a Buyer or Investor
- Ask who manages the building. If an RTM company runs it, ask for its accounts, the directors, and the insurance and maintenance arrangements.
- Check service charge records. A leaseholder-run building still needs a sound budget and a reserve; see reserve and sinking funds.
- Look at major works. Ask about planned works and how they will be funded; see Section 20 consultation.
- Ask about insurance. Confirm who arranges the buildings policy and that it is current.
- Understand the workload. An RTM company relies on volunteer directors. Buildings with few resident owners can struggle.
- Overseas owners. If you are not resident, plan how you will take part, or whether you prefer a managing agent.
Questions for Your Solicitor
- Is the building managed under RTM, by a landlord's agent, or through commonhold?
- Who holds the freehold, and are there plans to sell it?
- What do the management accounts and sinking fund look like?
- Are there any disputes or tribunal cases?
- How will the lender treat this property?
Why Choose Banke Properties UK?
Banke helps overseas investors understand the ownership structure of a UK flat before they commit, and works with independent solicitors for the legal checks. To discuss a specific property, contact the Banke UK team.
Conclusion
Right to Manage and commonhold are both ways for flat owners to gain control, but they are different tools. Know who manages the building you are buying, ask to see the records, and have a solicitor confirm the position before you exchange.
This article is general information, not legal, tax or financial advice. Leasehold and commonhold law in England is subject to reform. Confirm the current position on GOV.UK, with LEASE and with a qualified solicitor before you buy.