What is Right to Manage?

UK law (Chapter 15 of the Commonhold and Leasehold Reform Act 2002) allows leaseholders to take control of their building’s management by forming a “Right to Manage” (RTM) company.Once formed, the RTM company can appoint a new managing agent to replace the current one (FirstPort), thereby potentially lowering service charges, improving services, and increasing transparency.The Leasehold Advisory Service provides detailed information about how Right to Manage works in general.

Why do we need RTM?

FirstPort (the current managing agent) is appointed by Barratts (the freeholder/superior landlord) and not answerable to the paying leaseholders. By appointing our own managing agent we can control costs and service quality.

1. Rising service charges

Service charges are increasing significantly:• 2020: £1,463,145
• 2021: £1,508,980 (3.13% increase)
• 2022: £1,569,949 (4.04% increase)
• 2023: £1,867,069 (18.93% increase)
• 2024: £2,278,480 (22.04% increase)
• 2025* (Budget): £2,323,219 (1.96% forecast increase, possibly much more)
• 2026 (Draft Budget): £2,685,000 (15.57% increase)* For 2025, we have not received the actual accounts yet. We expect at least a 10% increase, based on FirstPort’s communication and shortfalls in the 2024 budget.

• View budget PDF showing potential savings of 25%*

* based on our discussions with alternate RTM service companies

2. Poor management

Leaseholders have received less-effective services, inadequate repairs, lack of transparency, and slow or unhelpful responses.For example, in 2024 alone, leaseholders paid nearly £15,000 in accounting fees, but the accounts were only partially approved, and around £139,000 of transactions remain unexplained.

3. No accountability

FirstPort is appointed by and accountable to Barratts—not to the leaseholders—leading to a lack of incentive to contain costs or improve service. Barratts is the developer and the “superior landlord” of Dalston Square.To dispute service charges under current conditions, leaseholders must resort to the First-Tier (Property) Tribunal, risking paying FirstPort’s legal costs.

4. Impact on property values

Flats in Dalston Square are selling at around 20% below market value, partly because of the high charges. Service charges are now nearly 27% of the rental amounts.

What happens if we
don't form an RTM?

Then we have no effective means of challenging the ever inflating service charges and poor service.Without RTM if the leaseholders think that the Service Charges are unfair or unreasonable, the only way to challenge this is to go to the First-Tier Tribunal, which is a protracted and time-consuming process.In addition there is a risk that the Leaseholders will have to pay for FirstPort’s legal costs, and usually the leaseholders cannot get back their legal costs, even if they are successful.If you want to have your say in how the development is managed and how your service charge is spent then please sign up.

Benefits of RTM

How we can achieve RTM

How RTM works

Legal basis

The Right to Manage (RTM) is granted by Chapter 15 of the Commonhold and Leasehold Reform Act 2002 (the “RTM Legislation”).It allows qualifying leaseholders—those holding leases of more than 21 years—to set up a special RTM Company that can take over management without having to prove any fault against the current landlord or managing agent.

How Dalston Square must be structured for RTM

Dalston Square comprises multiple blocks/towers which under the legislation will require three separate RTM Companies:Dalston Square Phase One RTM Company Ltd (16424432)
Premises: Collins Tower, Gaumont Tower, Dunbar Tower, Raddon Tower, Labyrinth Tower.Dalston Square Phase Two RTM Company Ltd (16424817)
Premises: Ocean House, Dekker House, Burke House, Thomas Tower.Dalston Square Phase Three RTM Company Ltd (16425472)
Premises: Sledge Tower, Abraham House, Marley House, Joplin House, Ruffin House, Wonder House.Each RTM Company is a company limited by guarantee, with Articles of Association that define the rules, and a definition of “Premises” for the blocks it covers.

Becoming a Member of the RTM Company

Your membership is crucialAt least 50% plus one of the qualifying leaseholders must sign up for each RTM Company in order to proceed.

Directors and their Role

Directors manage the RTM Company according to its Articles of Association and the law. They are unpaid volunteers and will have Directors & Officers insurance to protect against personal liability.Initial Directors (across the three RTM Companies):

Kavi Dhana - Owner for 12 years. Accountant - LinkedIn
Lin Lee - Owner for 14 years. Solicitor - LinkedIn
Rachel Stockley - Owner for 12 years. Property professional - LinkedIn
Tim Deeson - Owner/Resident for 10 years. Business consultant - LinkedIn
Yvo van Amerongen - Owner for 14 years. Business consultant LinkedIn

We welcome more leaseholders with relevant skills (financial, legal, property) to join as directors. Please reach out at [email protected].

The RTM Process:
step by step

1. Land Registry Search – COMPLETE
We needed to identify and contact every qualifying leaseholder.2. Set Up RTM Companies – COMPLETE
Three companies exist to cover all of Dalston Square.3. Invite Leaseholders to Join - CURRENT STAGE
Every qualifying leaseholder can become a member of the relevant RTM Company.
We need 50% +1 to proceed.4. Appoint a Competent Management Agent - NEXT
The Directors of the RTM Companies have dedicated significant time and effort to engaging with management companies to gain a clear understanding of the services offered, as well as the legal and financial terms of any potential agreements.While discussions with Haus Block Management have been very positive, we are still to run a transparent, competitive tender process. There are currently no commitments to any new management company and we welcome feedback from leaseholders.5. Invite Non-Participating Leaseholders
By law, before formally notifying Barratts/Freeholder, we must serve notice to all qualifying leaseholders who have not yet joined, inviting them again to participate.6. Serve Notice of Claim to Barratts/Freeholder
This legal step triggers the RTM claim.The freeholder has one month to challenge. If they do, we can correct any procedural issues or go to a Tribunal.7. Response from Barratts/Freeholder
If they do not challenge, or if any challenge is resolved, the RTM Company wins the right to manage on the “acquisition date,” typically four months after the notice.8. Transition Period
FirstPort/Barratts notify existing contractors and must hand over relevant information and funds to the RTM Company and its new managing agent.9. Full Management
Once the RTM is secured, the new managing agent takes over day-to-day responsibilities with continued oversight by RTM directors ensuring transparent financials, improved performance, and better services.

Frequently Asked Questions

I already joined the Residents’ Association (RA). Do I need to join RTM?
Yes. The RA and RTM Company have different legal structures and aims. The RTM specifically focuses on obtaining legal control over management by appointing a new managing agent.I am in the process of selling my flat, should I still sign up?
Yes, please sign up. If you do complete the sale of your flat before we give notice for an RTM, please ask the buyer to sign up to become a member of the RTM.What are the costs of RTM?
So far, major costs (land registry searches, company registration) were around £2,000, covered by volunteer donations.Once a management agent is chosen, they often assist with the RTM process for the first year’s fee.We will be transparent with you about costs, and how they will be funded, throughout the RTM process.How much could I save in Service Charges?
We are working with a number of reputable managing agents who are reviewing the currently 2024-2025 Service Charge and are putting in their proposals of what these costs should be. The savings will depend on the building that you are in, and we will share this with you here.Currently most of the service charges are made up of the “estate costs” and “block costs”. In addition, there is a cost of cleaning the outside windows, the gym and the car parks that are allocated to the flats that are entitled to these services.Once an RTM is successful, the “block costs” will be transferred to the RTM Company. Unfortunately, we do not have an automatic right to take over the “estate costs” yet, due to the way that a recent RTM case had been decided. However, we have asked the managing agents who are interested in working with us to quote for both the estate costs and the block costs. We believe that taking over the block costs represents a significant starting point that would assist us in taking over the estate costs.Will RTM reduce ground rent or enable it to be managed differently?
No, Right to Manage (RTM) does not affect ground rent. Ground rent is set out in your lease and is paid directly to the freeholder (in this case, Barratt or their appointed ground rent collector). Even after a successful RTM, leaseholders will continue to pay ground rent as before, and the amount cannot be changed through RTM.RTM gives leaseholders control over how the building is managed (e.g. maintenance, cleaning, service charges), but it does not change ownership of the building or alter lease terms like ground rent.Do Estate Costs transfer automatically to the RTM?
Under recent case law (Settlers Court vs FirstPort), block costs automatically transfer but estate costs might not, unless the freeholder agrees or other legal steps are taken.Estate costs are about 25% of total service charges (mostly concierge salaries). If we can also bring estate management under RTM, there could be substantial savings, including reduced VAT.I’m an overseas landlord. Does RTM apply to me?
Yes. All leaseholders paying service charges have a vested interest in transparency, accountability, and lower costs. Your membership counts.I don’t live in Dalston Square but I own a property there. Should I still join?
Yes, if you own a lease in Dalston Square. RTM is about protecting your financial interests and property value.If you are a tenant (not a leaseholder) then you are not eligible to join but you should benefit from the change through improved services.Can leaseholders under a shared ownership scheme participate in the RTM?
Yes, leaseholders under a shared ownership scheme are qualifying leaseholders and are eligible to participate in the RTM. We hope that all the shared ownership leaseholders sign up too.Can council tenants living in Dalston Square participate in the RTM?
Under the current RTM legislation, council tenants are not qualifying leaseholders and are therefore not eligible to participate in the RTM. However, if you are a council tenant who live in Dalston Square and wish to have a say about the RTM, we would welcome your contribution and ask you to email [email protected]Who is FirstPort?
FirstPort (formerly Peverel) has managed Dalston Square since 2010.Across the UK, there are widespread complaints of rising service charges, lack of transparency, poor communication, and unmet repairs.Members of Parliament have echoed these concerns in letters to FirstPort’s Managing Director.Will reduced Service Charges mean reduced services?
No. We have many, many examples of charges that are too high, cannot be explained or have been incurred because Firstport are inefficient. Our expectation is that the current services will stay the same or will be improved.We believe costs can be cut while maintaining - or improving - service quality.Will RTM Directors be paid?
No. They serve as volunteers. They will carry Directors & Officers insurance to cover any personal liabilities.Do existing Landlord/Managing Agent contracts continue under RTM?
Typically, once RTM is acquired, previous contracts do not automatically continue. It’s the RTM Company’s choice to renew or replace them.Can any Leaseholder be a Director of the RTM company?
Generally, yes, subject to usual Companies House rules. We especially welcome those with financial, legal, or property-management expertise.What if we’re unhappy with the RTM Company’s management?
Members can call a general meeting (with 10% of members required to do so) and propose resolutions, including the removal or addition of directors.What about running the Estate (S1 Estate Charge)?
The right to manage legislation does not allow the running of the estate to be taken over by the RTM companies unless the freeholder agrees - recent case law.Currently, the estate charges comprise approximately 25% of total service charges; 90% of these costs relate to the concierge. There are numerous cases where the freeholder has given control of the estate over to RTM companies.If this were the case, then immediate savings of 20% VAT would be made by employing the concierge directly under the RTM companies. There would also be savings on the markup FirstPort is charging. There have been numerous requests for salary information of employees by position (i.e. no personal data), but FirstPort is refusing to provide a breakdown for “GDPR” reasons. The only information they have provided is an invoice of £40k per month for salaries (one row on the invoice).What will happen to the onsite FirstPort team if we change managing agent?
If we choose to switch managing agents through the Right to Manage (RTM) process, the future of the on-site FirstPort team (such as the concierge or maintenance staff) will depend on a few factors. These staff are often ultimately employed by FirstPort, so they do not automatically transfer to the new managing agent. However, depending on how the service is structured, employment laws like TUPE (Transfer of Undertakings – Protection of Employment) may apply. TUPE is designed to protect workers when a service changes hands, meaning the staff could transfer to the new agent under the same terms.Whether or not TUPE applies, the new managing agent will look at what the estate needs and make decisions accordingly, but the views and experience of the existing staff will also be taken into account. They may be retained, roles may be adjusted, or a new structure may be put in place. The RTM company will work closely with the agent to ensure any changes lead to better service and value for residents, while also treating the current staff fairly and respectfully.Why not just ask Barratts (Freeholder) to change the Managing Agent?
Barratts has not responded to Residents’ Association or leaseholder communications on this subject.Even if Barratts did appoint a new agent, they might still prioritise Barratts’ interests (e.g., unresolved post-cladding issues).An RTM agent, by contrast, works for and answers to the leaseholders.What are the concerns about FirstPort that have prompted initiative?
To describe our experience with FirstPort, we quote the following:“their service charges have risen very significantly with little or no explanation and that FirstPort has repeatedly failed to respond adequately to requests for summaries and evidence. There have been particular concerns raised about the charges your company is levying for insurance and the lack of transparency around the role [FirstPort] internal insurance brokerage, Knight Square, plays;""The standards of service they receive from FirstPort have consistently been poor and does not justify the aggressive increases in service charges. We have heard repeated stories of repairs not being adequately carried out, monitoring of repair quality and/or FirstPort being slow to act when repairs are required;""Communications have been poor and there is a little consultation before major works (Section 20) are carried out and with residents’ wishes are often ignored;""Instances of major works being carried out that in the opinion of leaseholders require a Section 20 where no notice has been served by FirstPort;"These are quotes from a letter to Martin King, FirstPort’s Managing Director, written by a number of members of Parliament who have received complaints about FirstPort from their constituents.We can only say that their experiences with Firstport perfectly describe our experience with First Port as leaseholders of Dalston Square.What does it mean to be a “member” of an RTM Company?
A member of an “RTM Company” is like a “Shareholder” for a company limited by shares. However, the RTM Company does not make a profit so the member is not entitled to dividends the way a shareholder would be. A member of the RTM Company’s liability will be limited to £1, in the way that a shareholder’s liability is limited to the call up value of the shares.A “member” of the RTM Company will have the right to appoint and remove the directors of the RTM Company. Their liability as a “member” is limited to a maximum of £1 should there be a winding up of the RTM Company and the RTM Company have liabilities (we do not expect this to be a likely scenario). A majority of the members can vote to appoint and remove the directors to the board of the RTM Company through a general meeting of the RTM Company.Why are three RTM companies required in Dalston Square?
Under the RTM Legislation, the RTM Company needs to fulfil the following requirements in order to successfully take over the management of Dalston Square:a) Building or part of a building that is structurally detached and contain at least 2 flats.It is in order to satisfy this requirement that Dalston Square needs to have three RTM Companies.b) At least two-thirds of the flats in the building must be owned by “qualifying leaseholders”.
Qualifying leaseholders means long leaseholders who hold leases of more than 21 years when the leases were first granted.This requirement is satisfied for each of the three RTM Companies.c) Non-residential areas (eg shops) cannot make up more than 50% of the whole area of the building.This requirement is satisfied for each of the three RTM Companies.d) 4. At least fifty percent of “qualifying leaseholders” need to become members of the RTM Company. This is what we are working towards!Email for further questions - [email protected]

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