RTM changes who manages the building, not who owes historic service charge arrears. Understanding what transfers and how to handle existing debts.
Check RTM EligibilityNo. Right to Manage does not cancel historic service charge arrears.
If a leaseholder owes service charge arrears to the landlord or previous managing agent, those debts remain payable (assuming they are valid).
RTM changes management functions. It does not change lease obligations or wipe historic debts.
Arrears owed for periods before the acquisition date remain payable to the landlord or previous managing agent.
The RTM company collects service charges going forward from the acquisition date.
Leaseholders with arrears may continue to receive demands from the previous managing agent or landlord for pre-RTM debts.
If leaseholders dispute the validity of historic service charges, RTM does not resolve those disputes.
Disputed charges may need to be challenged through the First-tier Tribunal separately from the RTM process.
Link to ServiceChargeChallenge.co.uk for service charge dispute support.
The RTM company should request a full financial reconciliation from the outgoing managing agent or landlord.
This should include:
Leaseholders with significant disputed arrears should consider resolving or clarifying the position before RTM acquisition.
The RTM company needs clear handover data. Unresolved arrears disputes can complicate the handover process.
Use our free RTM eligibility checker to understand whether your building qualifies and get an indicative cost estimate.
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