What Is an RTM (Right to Manage)?
A Right to Manage (RTM) company is a legal structure that allows leaseholders to take over the management of their building from the freeholder, without needing to prove fault or mismanagement.
Once an RTM company is successfully formed and the legal process completed, the leaseholders gain control of:
- Maintenance and repairs
- Insurance arrangements
- Service charge collection and budgeting
- Appointing managing agents
Importantly, the freeholder still owns the building, but management responsibility transfers to the RTM company.
RTM is often used when leaseholders are unhappy with how the block is being managed.
What Is an RMC (Residents’ Management Company)?
A Residents’ Management Company (RMC) is typically set up by the developer when a building is first constructed.
In this structure:
- Leaseholders usually become members (and sometimes directors) of the company.
- The RMC is responsible for managing the building from the outset.
- The freeholder may or may not be involved, depending on the structure.
An RMC is written into the lease from the beginning, it’s not something leaseholders have to apply for later.
The Key Differences
How they’re formed
- RTM: Created by leaseholders exercising a legal right.
- RMC: Usually set up by the developer when the building is built.
Why they exist
- RTM: Often formed due to dissatisfaction with management.
- RMC: Part of the original management structure.
Relationship with the freeholder
- RTM: Management transfers away from the freeholder.
- RMC: Structure defined in the lease from the start.
Which One Is Better?
Neither is automatically better, it depends on how well the building is run.
Both RTMs and RMCs:
- Require directors (usually leaseholders)
- Carry legal responsibilities
- Need proper accounting and compliance
- Often appoint a professional managing agent to handle day-to-day operations
The most important factor isn’t whether you have an RTM or an RMC, it’s whether the building is being managed competently, transparently, and proactively.
If you’re unsure how your block is structured or whether it’s working as it should, it’s worth getting clarity. Understanding the framework is the first step toward improving it.
