Does your block qualify?
The qualifying conditions for a Right to Manage claim, including the 50% non-residential limit that took effect on 3 March 2025.
Law stated as at England and Wales
The Right to Manage is a no-fault right. You do not have to show that the freeholder or the managing agent has done anything wrong, and you do not need anyone’s permission. What you do have to show is that the building, the leases and the level of participation all meet the conditions in Part 2 of the Commonhold and Leasehold Reform Act 2002. Get one of them wrong and the claim can be defeated on paper.
There are four questions to answer about the building, and then a shorter list of situations that take a block outside the scheme altogether.
Is it a self-contained building, or a self-contained part of one?
A self-contained building is one that is structurally detached. That covers most purpose-built blocks standing on their own.
A self-contained part of a building is harder, and this is where claims most often run into trouble. The part must be divided vertically from the rest of the building, it must be capable of being redeveloped independently, and the services serving it such as: water, drainage, electricity, gas must either already be independent, or be capable of being made independent without significant interruption to the rest of the building.
The practical consequence is that horizontal splits do not work. Flats on the upper floors of a building with a shop underneath cannot be carved out on their own; the claim has to be made for the whole structure, which then brings the non-residential limit into play.
Where an estate has several blocks, each block is normally its own set of premises and needs its own claim and, in practice, its own decision about whether to use one RTM company or several.
Are enough of the flats let on long leases?
The building must contain at least two flats held by qualifying tenants, and the flats held by qualifying tenants must be at least two-thirds of the total number of flats.
A qualifying tenant is someone holding under a long lease broadly, a lease originally granted for a term of more than 21 years. It does not matter how much of the term is left, so a lease with four years to run still counts. It does not matter whether the leaseholder lives there; buy-to-let landlords qualify. Assured shorthold tenants, company lets on short terms and business tenancies do not count.
Two things people get wrong here. First, the test looks at the lease as originally granted, not at the residue. Second, a flat can only have one qualifying tenant at a time, so a sub-let does not create a second vote.
Is the commercial space within the limit?
If part of the building is in non-residential use shops, offices, a surgery, a gym the internal floor area of those parts must not exceed 50% of the internal floor area of the whole building. Common parts are left out of the calculation on both sides.
This limit was 25% until 3 March 2025, when section 49 of the Leasehold and Freehold Reform Act 2024 came into force. A large number of mixed-use blocks were deliberately built with commercial space above 25% but below 50% precisely to defeat RTM claims. Those blocks are now in scope.
Floor area is the one part of the eligibility test where it is usually worth paying somebody. If the split is anywhere near the line, a measured survey from a surveyor working to a recognised measurement standard is far cheaper than losing a tribunal application over it.
Will enough leaseholders take part?
At the date the claim notice is given, the RTM company’s membership must include qualifying tenants of at least half the flats in the building. Not half the participating flats half of all the flatsssss.
In a block of 20 flats you need 10 members. In a block of two flats you need both. Membership means having actually been entered in the company’s register of members, so get the paperwork done before the notice goes out rather than relying on people who have said yes verbally.
When the Right to Manage is not available
Some buildings are outside the scheme however well they score on the tests above:
- The landlord is a local housing authority.
- The building is a converted house containing four flats or fewer, and the freeholder, or an adult member of their family has lived in one of the flats as their only or principal home for the last twelve months. This is the resident-landlord exception and it defeats a surprising number of small conversions.
- An RTM company is already in place for the building, or the right was acquired and then ceased within the last four years.
What to gather before going further
Before spending anything, collect the title register and title plan for the building from HM Land Registry, one sample lease, the number of flats and which are let on long leases, and the names and addresses of every leaseholder. You will need all of it for the notices, and the exercise itself usually surfaces the problems early a missing intermediate landlord, an unregistered title, a block that turns out to be two buildings.
If the building looks like it qualifies, the next step is forming the company.
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Sources
- Right to Manage Leasehold Advisory ServiceOpen Government Licence v3.0
- Commonhold and Leasehold Reform Act 2002, Part 2 Chapter 1 sections 72 to 75 and Schedule 6legislation.gov.uk Open Government Licence v3.0
- Leasehold and Freehold Reform Act 2024, section 49 raises the non-residential limit to 50%legislation.gov.uk Open Government Licence v3.0
- The Leasehold and Freehold Reform Act 2024 (Commencement No. 3) Regulations 2025legislation.gov.uk Open Government Licence v3.0
This page contains public sector information licensed under the Open Government Licence v3.0. It has been summarised and re-written by Better Leasehold; any errors are ours. Reproduction here does not imply endorsement by the Leasehold Advisory Service or by any government department.