How much will RTM cost me?

It is often the case that unhappy leaseholders are only driven to considering Right to Manage (RTM) after they have received an unwelcome increase in their service costs or an unexpected bill for maintenance works. Not surprisingly, they are usually reluctant to throw good money after bad so are wary of entering into an expensive RTM process they can’t afford. As a consequence, RTM is only considered as a last resort.


The good news is that RTM need not be expensive and may well end up saving leaseholders’ money. It is important, however, that leaseholders considering RTM do so with their eyes open. Here is a brief guide to the likely cost you will incur.

Firstly, you are likely to want to get some expert advice on the RTM process. Typically, this advice will come from either a firm of solicitors with expertise in RTM or a property management company with that expertise. One word of caution, RTM is quite a specialist area. Before appointing an advisor, therefore, check what their track record is and if possible ask to speak to leaseholders in other developments where they have acted before making an appointment. If they can’t demonstrate a successful track record, don’t appoint them. Once you have identified a suitable advisor make sure you agree their fees in advance. Most will agree a fee in advance which may be a charge made either on a per unit basis or a single fee that covers the whole of the development. Don’t forget that this won’t come out of the service charge so will have to be collected separately from the leaseholders supporting RTM. For an average size development, it should possible to find someone to take you through the process for between £1,000 - £2,000.  There are, however, some excellent management companies who are willing to provide advice on RTM for free and it could be very worthwhile shopping around for these. Usually, their advice is conditional on them then being appointed as manager for a period of at least 12 months.

You will also be liable for your landlord’s costs. Even for a very large development these should not be excessive. I would allow a total of £2,000 but often they will be less. If you do think they are excessive the landlord’s costs can be challenged before the First Tier Tribunal and there have been numerous instances of successful challenges. I would say, therefore, that for a typical development of thirty flats, a cost of around £200 per flat (which includes an amount for contingencies) would be a sensible amount to budget for, although actual costs may well end up as less.  Additionally, it may well be the case that a new managing agent controlled by the leaseholders is able to generate savings to the service charge budget of at least this amount.