Right to Manage Costs: What Leaseholders Should Budget For Before They Begin

If you are trying to budget for taking over management, you need numbers, not just a list of fee types. You are not required to use a solicitor. Leaseholders can apply for the right to manage themselves and keep acquisition costs down significantly by avoiding legal fees, though you still need to budget for company registration, serving notices correctly, and the time to follow the process. Many groups still instruct a solicitor for certainty. Once you are running the block, self-management is a practical option for most small schemes: directors do not need to be property professionals if they use a dedicated system, and leaseholders who take control of their building typically find transparency improves and recurring management overhead can be significantly lower than defaulting to a full managing agent — though some buildings still prefer an agent end-to-end, and that is a fair choice. Where you do use a solicitor, fees to acquire the right to manage in the UK are often £1,500 to £5,000 for a typical uncontested claim on a small block, but larger or disputed cases can cost more. Forming the RTM company is usually £50 to £100, and serving notices and related administration adds roughly £200 to £500. After handover, annual accounts and company filings often run £300 to £800 per year, building insurance depends on your block, and you either pay a managing agent or use specialist block software from around £20 to £60 a month if directors run things themselves.

 

Upfront Right to Manage Costs: Legal and Setup

 

Most of the one-off spend sits in legal work and getting the notices right when you use a solicitor. If you handle the claim yourself without a solicitor, your cash costs are often mainly company formation and notices, which can be hundreds of pounds rather than thousands in legal fees, but mistakes on eligibility or notices can cost time and money to fix later. Expect solicitor fees in roughly the £1,500 to £5,000 range when you do instruct one for a straightforward case, with higher figures if the freeholder contests the claim or your block is large. On top of that, budget about £50 to £100 to register the company and roughly £200 to £500 for serving notices and practical administration. You might also pay for extra advice or tribunal representation if something goes wrong.

 

Some groups buy packaged advice; others use a solicitor who specialises in RTM. Either way, ask for a written scope and confirm what is included before you instruct anyone.

 

Ongoing Costs After You've Acquired RTM

 

After the RTM company exists, you still fund the same core building costs as before, but you choose how they are delivered. You must insure the building and meet company filing and accounting duties; many small blocks spend £300 to £800 a year on accounts and filings alone. You might employ a managing agent, use volunteers, or run day-to-day work with block management software. Service charges do not vanish under RTM. They pay for repairs, insurance, compliance, and professional support.

 

Comparing your new budget with what the block paid under the previous landlord helps set a realistic service charge. Many blocks find costs fall substantially after switching — not by cutting insurance or repairs, but through clearer procurement, reduced duplicate fees, and reduced management overhead where self-management replaces a full agent package. Savings, when they come, usually flow from better procurement and transparency, not from skipping essential spending.

 

Headline Savings vs Hidden Costs

 

Lower service charges after RTM are possible, but they are not guaranteed. If the previous management was wasteful or opaque, you may find room to improve. If spending was already lean, the main gain may be control and accountability rather than a smaller bill. Hidden costs include director time, a learning curve, and one-off bills such as catch-up repairs or compliance work that surface after handover. Budget a reserve and allow for professional support in year one so surprises do not derail the block.

 

Budgeting Templates for Different Block Sizes

 

Small blocks with six to twelve flats might spend a few thousand pounds on acquisition, then run on a mix of volunteer input and a light-touch agent or block management software. Larger blocks often need more formal professional support, higher insurance premiums, and clearer governance. Draw up a simple sheet for acquisition (legal, company, notices) and for year one (insurance, accounts, management). Our right to manage process guide walks through the stages. Share it with other leaseholders before anyone commits so expectations stay aligned.

 

Plan for both the one-off cost of getting RTM and the ongoing cost of running the building. Clear numbers make it easier to deliver accountable management.

 

Frequently asked questions

 

How much does right to manage cost?

 

A straightforward RTM claim on a small block often costs roughly £2,000 to £6,000 all-in if you use a solicitor: solicitors typically £1,500 to £5,000, company formation £50 to £100, and notices £200 to £500. If you do not use a solicitor, the acquisition cash cost can be much lower, though you still pay company and notice costs and may buy one-off advice. Disputes or larger blocks can push totals higher. After handover you still pay for insurance, repairs, and accounts. Annual accounts and company filings alone often run £300 to £800 per year, before managing agent fees or software.

 

Who pays the right to manage legal costs?

 

In most cases the leaseholders who are taking RTM forward pay, through contributions or a collection before the company is fully funding itself. Early legal fees are often met by participating members or a ring-fenced pot. After incorporation, the company can pay or reimburse costs from money leaseholders raise, subject to your lease and resolutions. The freeholder typically pays their own legal costs unless a tribunal orders otherwise.

 

Can the freeholder claim their costs in an RTM application?

 

A tribunal can deal with costs in a contested RTM case, but you should not assume leaseholders will pay the freeholder's legal bill in full. Outcomes depend on the facts, the conduct of the parties, and what the tribunal decides. If the claim is disputed, costs may be addressed in the decision. Take advice on your own position because each case differs.

 

What ongoing costs does an RTM company have?

 

The company must fund building insurance, repairs and maintenance, accounting, company secretarial work, Companies House filing, and risk management. Many small blocks spend £300 to £800 a year on accounts and filings alone. You may also pay a managing agent, contractors, or block software from roughly £20 to £60 a month. Service charges still pay for essential services; control sits with the RTM directors.

 

Does right to manage save money on service charges?

 

Not automatically. RTM can improve transparency and value for money, but you still pay for insurance, repairs, compliance, and services. Savings can come from better contracts, removing duplicate fees, or running day-to-day management with volunteers and software where that suits the block — the complexity is often overstated, and most small blocks can be self-managed with the right system in place. If the building was already well run, or major works fall due, you may not see a lower charge. Where you do want a managing agent, treat professional fees as a valid budget line. Treat savings as a possible outcome, not a promise.

 

How Freehold.Pro helps

 

Once your RTM company is in place, Freehold.Pro helps directors track service charges and ongoing costs without drowning in spreadsheets.

 

Freehold.Pro is block management software built for small residential blocks. Track service charges, store documents, log maintenance, and stay compliant, all in one place. Try it free, no contract required.