RTM, RMC or share of freehold: which one runs your building?

If residents run your building, there’s a fair chance you’re a little hazy on exactly how. People say “we’ve got share of freehold” when they mean an RMC, or “we did Right to Manage” when they actually bought the freehold years ago. The labels get used loosely, and most of the time it doesn’t matter — until it does, usually when you’re selling, in dispute, or working out what you’re actually allowed to do.

So here’s a plain-English guide to the three structures a resident-run building in England or Wales usually takes, and how to tell which is yours. One honest caveat first: this is general information to help you recognise your own setup, not advice on which to pursue. For that, the free and government-funded Leasehold Advisory Service (lease-advice.org) is the place to go.

The single question underneath all three is this: do you manage the building, or do you own it?

Right to Manage (RTM)

An RTM company lets leaseholders take over the management of their building without buying the freehold and without proving anyone did anything wrong. You form a special type of company, meet the qualifying conditions, serve notice, and the management functions transfer across. The freeholder still owns the building — you’ve simply taken the running of it out of their hands.

It exists in England and Wales only, and the qualifying conditions are more reachable than many assume: the building must be self-contained, at least two-thirds of the flats held on long leases, no more than 50% of the floor space non-residential (a threshold that rose from 25% in March 2025, bringing many more mixed-use blocks into scope), and members equal to at least half the flats taking part. We cover the full mechanics, timeline and cost in our dedicated guide to Right to Manage.

What’s good about it. It’s a no-fault right — the freeholder can’t refuse if you qualify. You don’t need capital to buy anything. And if the claim is unchallenged, you’re managing the building around three months after serving notice. It’s the fastest, cheapest way to take control.

What’s less good. You manage, but you don’t own — the freeholder remains, the ground rent still exists, and the lease still shortens over time. RTM lifts the management headache but leaves the underlying leasehold structure intact. It also carries real duties: an RTM company that stops filing or stops managing properly can find itself in trouble.

Residents’ management company (RMC)

An RMC is a company that runs the building but does not own the freehold. The difference from RTM is how it came about: an RMC is usually set up by the developer when the building is built, and named in your leases from the start. If you bought a flat and found you were automatically a member of a management company, or became a director of one without ever running a campaign to take over, you’re almost certainly in an RMC.

The management sits with the residents by design, not by a claim you made. The freeholder still owns the building above you.

What’s good about it. The structure is already there — nothing to acquire, no notices to serve. Residents have a built-in say in how the building runs, and because the company is named in the leases, its authority is clear.

What’s less good. Because it was set up by someone else, an RMC can come with baggage — a managing agent appointed by the developer, terms you didn’t choose, or a company residents have quietly let fall dormant at Companies House. And as with RTM, you run the building but don’t own it: the freeholder, the ground rent and the lease length all remain.

Resident-owned freehold (share of freehold)

This is the ownership route. Through collective enfranchisement, the leaseholders buy the freehold of their building between them and hold it through a company they control. This is what “share of freehold” really means: you don’t just manage the building, you own it.

The qualifying conditions are broadly that at least two-thirds of the flats are held on long leases and at least half the flats take part. Because you’re buying an asset, there’s a price to agree and legal costs to meet, so it’s a larger undertaking than the other two.

What’s good about it. You remove the freeholder entirely. No outside landlord, no ground rent leaving the building, and the owners can grant themselves long, cheap lease extensions — fixing the shortening-lease problem the other two routes leave untouched. It’s a genuine selling point too: buyers like a resident-owned building. This is the most complete control available today.

What’s less good. It costs money up front and takes longer. And owning the freehold through a company means there’s a company to keep alive indefinitely — filings, directors, share transfers when flats change hands. A freehold company neglected for a few years can hold up a sale while it’s put right. You’ve solved the ownership problem, but taken on a permanent administrative one.

An important overlap: it can be two companies

Here’s the bit that trips people up, including plenty of directors who’ve been doing the job for years.

Managing and owning are two different jobs, and they can sit in two different companies. A building that has bought its freehold often ends up with both: a freehold company that owns the building, and a separate, older management company (an RMC named in the original leases) that still handles the day-to-day — maintenance, insurance, service charges. Both are real, both keep running, and you might be a director or member of one or the other, or both.

So “I’m a director of the management company” and “we own our freehold” can both be true at once — they’re simply describing two different companies doing two different jobs in the same building.

That’s why the label alone isn’t reliable. The one test that always works: look at who owns the freehold.

So which are you?

Start with the single question that decides it: did the leaseholders buy the freehold?

• Yes.You’re a resident-owned freehold building (share of freehold), even if a separate management company still does the day-to-day.
• No. You manage without owning, either through an RMC (set up with the building, named in your leases) or an RTM company (which you claimed, without buying anything). The giveaway between those two is how it began: inherited from the developer, or actively taken over.

Two places confirm it in minutes. Your lease will name a management company if you have one. Companies House shows what company or companies exist for your building and their type. And the definitive answer to “do we own the freehold?” is the freehold title at HM Land Registry — whoever is named there as owning the freehold is the freeholder, full stop. If that’s a company the residents control, you own your building. LEASE can help you read any of this if it isn’t obvious.

Whichever you are, the day-to-day job is remarkably similar: keep the records straight, the money visible, the compliance current, and the decisions properly made. The structure decides who owns what. It doesn’t change what good self-management looks like.

The one that’s coming: commonhold

There’s a fourth structure worth knowing about, because it may eventually make the others unnecessary: commonhold. Under commonhold you own your flat outright — a freehold title to your own home, not a lease — and the shared parts belong to all the flat owners together through an association you automatically join. No landlord, no ground rent, no lease winding down.

It has technically existed since 2002 but was almost never used, because converting a building needed everyone to agree, including the freeholder. The draft Commonhold and Leasehold Reform Bill would lower that to 50% of leaseholders — the change that could finally make it a real option for ordinary buildings. It’s still working through Parliament, so for now it’s a direction of travel rather than a choice you can make this year.

We’ll be straight about where we stand: we think commonhold is the fairer model, for the simple reason that people who own their homes should own them outright, not rent them slowly through a lease someone else controls. It’s the normal arrangement almost everywhere else in the world, and its arrival here is overdue — we’ve written more about why we back it. And if it reaches your building one day, none of the work of self-managing is wasted — commonhold still needs someone to run the place; it just removes the landlord from the picture.