Written by Alex Kane Head of Boydens Leasehold and Estate Management Team

The Government has begun implementing parts of the Leasehold and Freehold Reform Act 2024, bringing several welcome changes to the Right to Manage (RTM) process. These latest updates were activated via the Commencement No. 3 Regulations 2025, which came into force on 3 March 2025.

Whilst the improvements already in place will benefit many leaseholders, a number of further reaching reforms remain under consideration for future legislation. This leaves flat owners with a question: should they act now, or wait?

Key Changes Now in Force

1. Increased Eligibility for RTM

Previously, a building with more than 25% non residential use was excluded from the RTM regime. This threshold has now been raised to 50%, significantly expanding the number of mixed use buildings that may now qualify.

2. Changes to Cost Liability

Under the new rules, RTM companies and their members are no longer responsible for the landlord’s legal costs upon serving a claim notice unless exceptions under sections 87A or 87B of the Commonhold and Leasehold Reform Act 2002 apply. This removes a longstanding disincentive for leaseholders considering RTM.

3. Tribunal Takes Over Dispute Resolution

Responsibility for enforcing RTM obligations has been shifted from the County Court to the First tier Tribunal, which is generally better placed to deal with leasehold matters. This change is likely to simplify and accelerate dispute resolution where issues arise.

Further Reforms on the Horizon

The Law Commission’s 2020 report highlighted a number of deficiencies in the current RTM framework. Whilst some of its recommendations have now been implemented, most remain outstanding and may feature in a future Leasehold and Commonhold Reform Bill. Potential future reforms include:

• Extending RTM to leasehold houses and buildings with only one qualifying tenant
• Lowering the qualifying tenant threshold from two thirds to one half
• Permitting RTM claims over part of a building without the need for a clean vertical separation
• Allowing RTM claims across multiple buildings within the same estate
• Improving notice procedures, access to building information, and the handover of contracts
• Introducing a process for RTM companies to relinquish management and clarifying what happens when RTM ends

Should Flat Owners Wait?

For leaseholders in buildings that now qualify under the updated rules, especially those who were previously excluded due to the commercial use threshold, there may be little reason to delay. The removal of landlord cost liability and the move to the Tribunal make the process more manageable and less financially risky.

However, for those in buildings that still fall outside the eligibility criteria, such as leasehold houses or buildings with only one qualifying flat, there may be no choice but to wait for further reform. Similarly, leaseholders in estates with complex layouts or multiple blocks might wish to hold off until additional flexibility is introduced.

Ultimately, the decision will depend on the specific characteristics of each property. In many cases, proceeding under the current rules may now be both viable and beneficial.

Ground Rent Reform – What’s Next?

Separately, the Government is reviewing how ground rents under existing leases should be handled. A consultation held in 2023 proposed several possible outcomes:

• Reducing ground rent to a peppercorn
• Imposing a financial cap
• Freezing it at the original level
• Or linking it to property value

These proposals remain under consideration, but the Government has made clear its intention to address excessive and unregulated ground rents. If a cap is introduced retrospectively, it could reduce the cost of lease extensions and freehold purchases, so leaseholders may wish to keep a close eye on developments before committing to either.

In Summary

The Leasehold and Freehold Reform Act 2024 introduces much needed improvements to the RTM regime, easing the process for many buildings that previously faced significant barriers. For those who are now eligible, it may be an opportune moment to take action.

For others, particularly those who still fall outside the scope of the RTM or who may benefit from future simplifications, waiting could still be the better option.

We are advising clients on both routes and can help you assess the best course of action based on your building’s circumstances.

If you would like to discuss your options, please do not hesitate to get in touch with a expert [email protected].