If you own a flat in a block, the way the building is managed matters just as much as the lease itself. There are three common structures in England & Wales: freeholder managed, Right to Manage (RTM), and Residents’ Management Company (RMC). Each comes with different powers, responsibilities, and limitations.
Freeholder Managed
This is the default setup. The freeholder (landlord) retains control of the building and either manages it themselves or appoints a managing agent.
What the freeholder can do:
- Arrange maintenance, repairs, and insurance
- Set and collect service charges (must be reasonable under law)
- Enforce lease terms
- Appoint/manages agents
What leaseholders can do:
- Challenge service charges at the First-tier Tribunal
- Request information (Section 21 & 22 of the Landlord & Tenant Act 1985)
- Take over management via RTM (if eligible)
Pros:
- Clear structure and responsibility
- Professional management (if a good agent is used)
- Less admin burden on leaseholders
Cons:
- Leaseholders have limited control
- Risk of poor management or excessive charges
- Potential conflict between profit and service quality
Right to Manage (RTM)
RTM is a statutory right under the Commonhold and Leasehold Reform Act 2002. It allows leaseholders to take over management without buying the freehold.
What the RTM company can do:
- Take over management functions (repairs, insurance, service charges)
- Appoint their own managing agent
- Control day-to-day running of the building
What the freeholder still does:
- Retains ownership of the freehold
- Still receives ground rent (if applicable)
- Must be consulted on certain matters
What RTM cannot do:
- Vary leases
- Collect ground rent (unless agreed)
- Deal with matters outside management functions
Pros:
- Leaseholders gain control without buying the freehold
- Can replace poor management
- No need to prove fault by the freeholder
Cons:
- Legal process to set up
- Ongoing admin and responsibility
- Risk of inexperienced management
Residents’ Management Company (RMC)
An RMC is usually set up by the developer when the block is built. Leaseholders become members (and sometimes directors), but the freeholder still owns the building.
What the RMC does:
- Manages the building (often via an agent)
- Collects service charges
- Makes decisions on maintenance
What the freeholder does:
- Retains the freehold
- May have limited involvement depending on the lease
Key point:
The powers of an RMC come from the lease, not statute like RTM. So what it can and can’t do depends entirely on how the lease is written.
Pros:
- Built-in leaseholder control from day one
- Structured management framework
- Often smoother than RTM (no takeover process)
Cons:
- Directors carry legal responsibilities
- Can be ineffective if poorly run
- Lease terms may limit control
Key Differences (Quick Summary)
| Feature | Freeholder Managed | RTM | RMC |
|---|---|---|---|
| Who controls management | Freeholder | Leaseholders (via RTM Co.) | Leaseholders (via company) |
| Ownership of freehold | Freeholder | Freeholder | Freeholder |
| Legal basis | Lease | Statutory right | Lease/company structure |
| Ease of setup | Already in place | Formal legal process | Set up at development stage |
What You Can and Can’t Do
- Leaseholders cannot simply “take over” unless they use RTM or own/control an RMC.
- Freeholders cannot charge whatever they like — service charges must be reasonable and justifiable.
- RTM and RMC directors must act in the best interests of the building and comply with company law.
- No structure allows ignoring the lease — it remains the governing document in all cases.
Final Thoughts
There’s no perfect setup.
- Freeholder managed works well with a competent landlord.
- RTM is useful where management is poor and leaseholders want control.
- RMC offers a balanced approach where leaseholders are already involved.
Understanding which structure applies to your building is key — it determines who makes decisions, how money is handled, and what rights you actually have.