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Residential leasehold specialist From 3 March 2025, key provisions of the Leasehold and Freehold Reform Act 2024 (LAFRA) came into force, bringing significant changes to how leaseholders can take control of their buildings.
These changes make the Right to Manage (RTM) process more affordable, straightforward, and accessible to a broader range of buildings than ever before. As part of the Government’s effort to establish a fairer system between landlords and leaseholders, we anticipate a significant increase in RTM claims.
What is the Right to Manage?
The Right to Manage was established by the Commonhold and Leasehold Reform Act 2002 (CLRA). It grants qualifying leaseholders in residential blocks the legal right to take over the management responsibilities of their building, without needing to prove poor management or landlord wrongdoing.
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Why would you want the Right to Manage?
Taking control through RTM gives leaseholders the ability to:
- Manage service charges
- Choose your own contractors
- Oversee building upkeep directly
- Control costs more effectively
For many, this is not just about saving money – it’s about taking ownership of the place you call home. Typically, leaseholders care more about standards and cost-effectiveness than a remote landlord or managing agent.
Do you qualify for RTM?
Under Section 72(1) of CLRA, premises qualify for RTM if:
- they consist of a self-contained building, or part of one (with or without surrounding land);
- they contain two or more flats held by qualifying tenants; and
- those qualifying tenants hold at least two-thirds of the flats.
LAFRA changes
LAFRA has implemented some key reforms that make RTM more accessible:
More buildings qualify – commercial threshold raised to 50%
Previously, if more than 25% of your building was used for commercial purposes, you could not claim RTM. That has now changed. Section 49 of LAFRA has raised the threshold to 50%.
This means many mixed-use buildings that were previously excluded now qualify. A surveyor will usually need to confirm the floor space breakdown, unless it’s obvious.
Leaseholders no longer responsible for the freeholder’s legal costs
Under the old rules, leaseholders were often required to pay the landlord’s legal fees, even if the RTM application was unsuccessful. Section 50 of LAFRA removes this burden and costs can only be awarded in limited situations (e.g., if the RTM company behaves unreasonably and the case fails).
This change makes RTM less risky and more affordable, discouraging unnecessary legal resistance from landlords.
Fairer voting power – cap on freeholder influence
RTM companies operate as limited companies, governed by Articles of Association – a set of rules that govern how the company operates.
Previously, if your building had large commercial areas, your landlord could acquire significant voting power, sometimes enough to control the RTM company. However, the catchily-titled RTM Companies (Model Articles) (England) (Amendment) Regulations 2025 now impose a limit. A landlord can only exercise up to one-third of the votes compared to leaseholders, preventing them from dominating the management company.
In summary
The new reforms ushered in by LAFRA mean:
- More buildings can qualify for the Right to Manage
- Leaseholders will save on legal costs
- Control will remain with leaseholders, not landlords
Therefore, it’s now easier, cheaper, and fairer to take control of how your building is managed.