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Property Ownership

Outright ownership of land and any buildings on it, with no time limit. The freeholder owns the property indefinitely.
Ownership of a property for a fixed period of time (the lease term), typically 99-999 years. The leaseholder owns the property but not the land it sits on.
When leaseholders collectively own the freehold of their building, usually through a company. Each leaseholder owns a share of the freehold company.
A form of property ownership where you own your flat outright (not leasehold) and share ownership of common areas with other owners.

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Management Structures

A legal right allowing leaseholders to take over management of their building from the freeholder without proving fault. Introduced by the Commonhold and Leasehold Reform Act 2002.
A company owned by the leaseholders that manages the building. Often set up when the freehold is purchased collectively.
A professional company hired to handle day-to-day management of a building, including maintenance, accounts, and compliance.
The owner of the freehold (the land). In leasehold buildings, the freeholder grants leases and often manages the building or appoints a managing agent.

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Financial Terms

Annual charges paid by leaseholders to cover the cost of maintaining common areas, buildings insurance, and other shared expenses.
An annual payment made by leaseholders to the freeholder as specified in the lease. Recent legislation limits ground rent on new leases.
Money set aside from service charges to pay for major future works like roof replacement or lift refurbishment.
Legal requirement to consult leaseholders before carrying out qualifying works costing more than £250 per leaseholder.

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RTM Process

The formal notice served on the freeholder to exercise the Right to Manage. Must be signed by the RTM company.
The freeholder’s response to a claim notice, which may accept or dispute the RTM claim.
The date when management responsibility transfers to the RTM company, typically 3 months after the claim notice.
A leaseholder with a long lease (originally over 21 years) who can participate in RTM.
The court that handles disputes about service charges, lease terms, and property management. Formerly the Leasehold Valuation Tribunal.
Professional body that sets standards for property management. RICS-qualified managers follow a code of practice.
A formal notice served by a leaseholder to request a lease extension.
Legislation introducing new safety requirements for residential buildings, particularly those over 18 metres.

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Common Abbreviations

AbbreviationMeaning
RTMRight to Manage
RMCResident Management Company
FTTFirst-tier Tribunal
RICSRoyal Institution of Chartered Surveyors
S20Section 20 Consultation
LVTLeasehold Valuation Tribunal (now FTT)
ARMAAssociation of Residential Managing Agents
CMLCouncil of Mortgage Lenders