The RTM acquisition date: what happens on the day and after

What you take over

From the acquisition dateAcquisition dateThe date on which an RTM company takes over the management of the building from the landlord., the RTM company has the management functions the leases gave the landlord, or any other party such as a management company. The Act describes them as functions "with respect to services, repairs, maintenance, improvements, insurance and management" (s.96(5)).

In everyday terms, the company now:

• sets the budget and bills the leaseholders (issues the service-charge demands) under the leases;
• holds the service-charge money on trust and accounts for it;
• insures the building, if the lease made that the landlord's job;
• repairs and maintains the structure and common parts;
• is the responsible person for fire safety in the common parts;
• deals with approvals the leases require, such as alterations or sub-letting;
• answers leaseholders' statutory requests, such as a summary of costs or insurance details.

The leaseholder protections in the Landlord and Tenant Act 1985 (sections 18 to 30) apply to the RTM company as if it were the landlord (Schedule 7). So do the trust rules for service-charge money.

What stays with the landlord

• The freehold and the ground rent.
• Forfeiture. The RTM company can't forfeit a lease (s.96(6)(b)).
• Lease extensions and anything else that isn't management.
• Matters concerning only a flat or unit that isn't held by a qualifying leaseholder, such as a shop let on a business lease.

The landlord can't carry out the functions you've taken over, unless you agree (s.97(2)). It may still insure the building at its own expense.

The money

• Your period: payments for management functions from the acquisition date are made to the RTM company.
• Their period: service charges for costs incurred before the acquisition date are still owed to the old landlord or manager. Don't demand them yourself, even if a leaseholder was in arrears.
• The handover: the old manager must pay over the service-charge money it holds that isn't needed for its own period's costs, including any reserve, on the acquisition date or as soon as reasonably practicable. See accrued uncommitted service chargesAccrued uncommitted service chargesThe service-charge money held by the outgoing landlord or managing agent on the RTM acquisition date, less what is needed for costs already incurred, which must be paid over to the RTM company..

Approvals and the landlord

Where a lease needs the landlord's approval (for example, to sub-let or make alterations), the RTM company now gives it. But it must notify the landlord first (s.98):

• 30 days' notice for assignment, under-letting, charging, parting with possession, structural alterations or improvements, or a change of use;
• 14 days' notice for anything else.

If the landlord objects in time, the company can only grant approval with the landlord's written agreement or the tribunal's decision (s.99).

Breaches of the lease

The RTM company can enforce the leaseholders' promises, but never by forfeiture. For promises that weren't transferred to it, it must report a breach to the landlord within 3 months of it coming to the company's attention, unless it has been put right or the landlord has said it doesn't need reports (s.101).

The landlord as a member

From the acquisition date, the landlord is entitled to join the RTM company. Since 3 March 2025, landlords' votes are capped at one third of the votes of the qualifying leaseholders.

Your first jobs

On day one, check that buildings insurance is in force, that leaseholders know where to pay and how to report problems, and that you have the fire risk assessment and fire safety information from the old manager. Then work through Your first 90 days.

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This is general information, not legal advice. Every building and lease is different. For free initial advice, contact LEASE (The Leasehold Advisory Service): https://www.lease-advice.org/