Budgeting for the right to manage means getting real numbers, not just a list of fee types. The good news is you are not required to use a solicitor — leaseholders can run the process themselves and keep costs down significantly. But you still need to budget for company registration, serving notices correctly, and your own time.

Where you do instruct a solicitor, fees for a straightforward uncontested claim on a small block typically run £1,500 to £5,000. Company formation costs £50 to £100. Serving notices adds roughly £200 to £500. After handover, annual accounts and company filings often run £300 to £800 per year.

Once you are running the block, self-management is a practical option for most small schemes. Directors do not need to be property professionals — and leaseholders who take control typically find transparency improves and recurring costs fall compared with defaulting to a full managing agent.

Upfront Right to Manage Costs: Legal and Setup

Most of the one-off spend sits in legal work and getting the notices right. If you handle the claim yourself, your cash costs are mainly company formation and notices — often hundreds of pounds rather than thousands. But mistakes on eligibility or notice wording can cost time and money to fix later.

Where you do instruct a solicitor, expect fees in the £1,500 to £5,000 range for a straightforward case. Larger blocks or contested claims push that higher. Budget around £50 to £100 for company registration and £200 to £500 for notices and administration on top of that.

Some groups use RTM specialists who guide you from eligibility to handover. Others instruct a solicitor for the notices only and handle the rest themselves. Either way, get a written scope before you instruct anyone and confirm exactly what is included.

Ongoing Costs After You've Acquired RTM

After the RTM company takes over, you still fund the same core building costs as before — you just decide how they are delivered. Building insurance is non-negotiable. Company filing and accounting duties remain. Many small blocks spend £300 to £800 a year on accounts and filings alone, before any management fees.

You can employ a managing agent, use volunteers with block management software, or combine both. Service charges do not disappear under RTM — they still pay for repairs, insurance, compliance, and professional support. What changes is who controls how that money is spent. Many directors pair that control with service charge software built for UK block governance so demands and year-end packs stay defensible.

Comparing your new budget with what the block paid previously helps set realistic service charge demands. Where savings come, they usually flow from better procurement and fewer duplicate fees — not from cutting essential spending.

Headline Savings vs Hidden Costs

Lower service charges after RTM are possible but not guaranteed. If previous management was wasteful or opaque, you may find real room to improve. If spending was already lean, the main gain is control and accountability rather than a smaller bill.

Hidden costs catch many new RTM companies off guard. Director time is real. There is a learning curve. Catch-up repairs and compliance work that were deferred under previous management often surface in year one.

Budget a reserve before you take over and allow for professional support in the first year. Surprises are easier to absorb when you have planned for them.

Budgeting 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 directors and block management software. Larger blocks typically need more formal professional support, higher insurance premiums, and clearer governance structures.

Draw up two simple sheets before you commit — one for acquisition costs (legal, company formation, notices) and one for year-one running costs (insurance, accounts, management). Our right to manage process guide walks through the legal stages if you need a starting point.

Share both sheets with all participating leaseholders before anyone commits. Aligned expectations at the start make for a smoother handover.

Frequently Asked Questions

How much does right to manage cost?

A straightforward RTM claim on a small block often costs £2,000 to £6,000 all-in with a solicitor. Without one, the cash cost can be much lower — mainly company formation and notice fees. Disputes or larger blocks push costs higher. After handover, budget £300 to £800 per year for accounts and filings before any management fees.

Who pays the right to manage legal costs?

In most cases, the leaseholders taking RTM forward pay — through contributions or a ring-fenced pot before the company is self-funding. After incorporation, the company can reimburse costs from service charge funds, subject to your lease. 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 case, but leaseholders should not assume they will pay the freeholder's full legal bill. Outcomes depend on the facts, conduct of the parties, and the tribunal's decision. Take advice on your specific position — each case differs.

What ongoing costs does an RTM company have?

The company must fund building insurance, repairs, maintenance, accounting, Companies House filing, and compliance. Many small blocks spend £300 to £800 a year on accounts and filings alone. Add managing agent fees or block software costs — typically £20 to £60 a month for software. Service charges fund essential services; the RTM directors control how they are spent.

Does right to manage save money on service charges?

Not automatically. RTM improves transparency and gives you control over procurement, which is where savings typically come from — not from cutting insurance or skipping compliance. If the building was already well run, the main benefit may be accountability rather than a lower bill. Treat savings as a possible outcome, not a promise.

How Freehold.Pro Helps

Once your RTM company has taken over, Freehold.Pro gives directors one place to track service charges, compliance deadlines, and documents — without drowning in spreadsheets.

Try Freehold.Pro free, no contract required. Get started today.