Taking Control of Your Block: Buying the Freehold vs. Right to Manage

Want to Take Control of Your Building?

If you own a flat and are frustrated by spiralling service charges, neglected repairs, or poor management, taking control is likely your top priority. Legally, you have two main options: buying the freehold together with your neighbours (Collective Enfranchisement) or taking over the running of the building through a Right to Manage (RTM) company. While buying the freehold is often seen as the ultimate goal, it isn't always the easiest first step, especially when money is tight or getting neighbours to agree is difficult.

The Ultimate Prize: Buying the Freehold

The appeal of buying your freehold is obvious. By grouping together to purchase it, you and your neighbours gain total control over how your building is run. You also get the massive financial perk of extending your leases and reducing your ground rent to zero (a 'peppercorn' rent). This route boosts the value of your flats and removes a difficult third-party landlord from the picture entirely.

The Cost Barrier

However, buying a freehold is expensive. On top of the purchase price for the building, participating flat owners have to cover valuation experts, legal fees, and often the outgoing landlord's costs too. Legally, you need at least 50% of the flat owners to join in. If you live in a block with buy-to-let investors, neighbours who aren't interested, or residents who simply don't have the spare cash, raising the funds to buy the freehold can quickly hit a brick wall.

A Smarter Alternative? The Right to Manage

This is where the Right to Manage (RTM) comes in as a brilliant alternative. RTM is a legal right that allows leaseholders to take over the management of their building without having to buy the freehold. Better yet, it is a "no-fault" process, meaning you don’t even have to prove that your current landlord has done anything wrong.

Lowering the Costs and Hassle

The hurdle for RTM is much lower. While you still need 50% of the flat owners to agree, the financial commitment is tiny in comparison. You only need to cover the legal and administrative costs of setting up the RTM company and serving the correct notices, there is no premium to pay for the building itself. It is much easier to convince your neighbours to chip in a modest amount for legal fees to secure better management than it is to ask them for potentially thousands of pounds to buy the freehold.

Taking over the management means you can immediately stop the bleeding of excessive service charges. You can hire your own managing agent, set the repair schedule, and put control of your everyday living environment back into the hands of the people who actually live there, managing reserve funds transparently.

A Stepping Stone to Buying the Freehold

Importantly, doing an RTM claim doesn't stop you from buying the freehold later. In fact, it’s often a great stepping stone. Once the RTM is set up and residents are successfully running the block, neighbours tend to become more engaged, better organised, and more financially prepared to group together and buy the freehold in the future.

Taking a Look at Your Options

Ultimately, deciding between these two routes requires a thorough look at your specific building: who lives there, what their budgets are, and how well everyone gets along. If the funds are there and everyone agrees, buying the freehold is often the best legal and financial choice. But if getting people to participate is a struggle and you just want to fix the management right now, the Right to Manage is a highly effective, cost-efficient pivot.

How can we help?

Maria Guida is a highly experienced Associate Partner in the Laurus Property team. She has extensive experience across residential and commercial property law. She specialises in leasehold enfranchisement, freehold and leasehold transactions, high-value and complex mixed-use developments, commercial leases for landlords and tenants, and the acquisition and disposal of offices, warehouses, hospitality and industrial premises.

The above is intended as general guidance only. For specific and tailored advice on extending your lease, buying your freehold or advice on the right to manage process, call us on 020 3146 6300 or email Maria directly at maria.guida@lauruslaw.co.uk