Right to manage after the 2024 Act: cheaper claims and a wider 50% limit

What changed

The right to manage lets leaseholders form a company and take over the management of their building from the landlord, without buying the freehold and without proving the landlord did anything wrong. Two changes from the Leasehold and Freehold Reform Act 2024 took effect on 3 March 2025:

• buildings where up to 50% of the internal floor area is non-residential can now qualify (the limit was 25%); and
• leaseholders generally no longer pay the landlord’s costs of a claim. Each side bears its own, with tribunal costs only in limited cases.

How a claim works

1. Check the building qualifies. It must be a self-contained building or part of one, with at least two flats held by long leaseholders, who must hold at least two-thirds of the flats. Some buildings are excluded, including some with a resident landlord and four or fewer flats.
2. Form a right to manage company limited by guarantee, using the prescribed model articles.
3. Invite every qualifying leaseholder who is not yet a member to join, with a notice of invitation to participate, and wait at least 14 days.
4. Serve the claim notice on the landlord. Members must include at least half of the qualifying leaseholders.
5. The landlord replies with a counter-notice. If it disputes the claim, the company can apply to the tribunal.
6. Take over on the acquisition date, at least three months after the counter-notice date. The landlord or old managing agent must hand over unspent service charge money.

Claims are often challenged on technical points in the notices, so many companies pay a solicitor to check them before they are served.

What it means for your building

If your block has an outside freeholder and a managing agent the leaseholders are unhappy with, the right to manage is now cheaper and open to more mixed-use buildings than before. Once you take over, the company’s directors are responsible for running the building, so plan who will do the work and how.

What to do now

• Count the flats, the long leaseholders and the commercial floor area, and check the two-thirds and 50% tests.
• Talk to your neighbours: you need at least half the qualifying leaseholders as members.
• Read the Leasehold Advisory Service guide and get the notices checked before you serve them.

This is general information about the law in England and Wales, not advice on your building.

How Freeholdpilot helps

Freeholdpilot can run the campaign: an eligibility check, a sign-up list for members, notices from templates and a timetable of deadlines. Once you take over, it gives the new board the tools to run the block.