Right to Manage Insurance: What Changes When an RTM Company Takes Over
When leaseholders exercise the Right to Manage, responsibility for the buildings insurance usually moves with it. Here is what that means in practice.
Right to Manage · 12 August 2026 · 8 min read
Right to Manage (RTM) allows qualifying leaseholders in a block of flats to take over the management functions of the building from the freeholder, without buying the freehold and without having to prove anything was done badly.
One of the functions that moves across is the buildings insurance. This article explains what that means for the new RTM company.
What Right to Manage Actually Transfers
An RTM company acquires the landlord's management functions under the leases. In practice that usually includes:
- Repair and maintenance of the structure and common parts
- Collecting and administering the service charge
- Arranging and maintaining the buildings insurance
- Managing contractors and communal services
It does not transfer ownership of the building. The freeholder still owns the freehold, still collects ground rent, and remains an interested party in the insurance.
Insurance Responsibility After the Handover
Once the acquisition date has passed, the RTM company generally becomes responsible for putting a buildings policy in place for the whole block. That means:
1. A new policy in the RTM company's name, covering the full building
2. The freeholder's interest usually noted on the policy
3. The premium recovered from leaseholders through the service charge
4. Policy details made available to leaseholders and to the freeholder
Timing matters. The old policy arranged by the freeholder may not simply carry over, so RTM directors commonly line up cover to start on the acquisition date rather than after it.
Our guide on RTM company insurance goes into the sequence in more detail.
What an RTM Buildings Policy Usually Includes
- Buildings cover for the structure of every flat and the shared parts
- Communal areas, including lifts, stairwells, gardens and car parks
- Property owners' liability
- Loss of rent or alternative accommodation after an insured event
- Optional directors' and officers' liability, protecting the volunteer directors of the RTM company
- Optional engineering inspection where there is a lift or pressurised plant
- Optional terrorism and legal expenses
Directors' and officers' cover comes up often, because RTM directors are usually leaseholders volunteering their time rather than professional managers.
Information Insurers Ask an RTM Company For
- Evidence that the RTM company has been formed and the acquisition date
- Number of flats and the occupancy of each
- Construction type, roof type and year built
- Declared rebuild cost and when it was last assessed
- Fire safety arrangements and any external wall assessment
- Claims history for the building, which the freeholder or previous agent should be able to supply
- Whether the block is self-managed or a managing agent has been appointed
Obtaining the claims history early is worth doing, because insurers usually want three to five years and it can take time to get from a previous agent.
Common Issues in the First Year
- Gaps at changeover — the old policy lapsing before the new one starts
- An out-of-date rebuild figure carried over from the freeholder's policy without review
- Missing claims history, which limits the insurers willing to quote
- No directors' cover, leaving volunteer directors personally exposed
- Service charge budgets set before the insurance cost is known
How We Help
Landlord Quote is an FCA authorised lead generation business. We do not arrange cover, give advice or quote premiums. We take your block's details and, where the enquiry matches, pass them to an FCA regulated broker experienced with RTM companies, who will contact you directly to discuss the building.
If your block is managed by a residents' management company named in the leases rather than an RTM company, see RMC buildings insurance.
Beyond Leads Ltd T/A Landlord Quote is an FCA authorised lead generation business. We do not give advice, arrange cover or quote premiums. If your enquiry is matched, your details are shared with an FCA regulated broker who specialises in this sector.
Beyond Leads Ltd T/A Landlord Quote (FCA FRN 940006) is an FCA authorised lead generation business. We do not provide insurance advice, recommend policies, arrange cover or quote premiums. This page is general information only. If your enquiry is matched, your details are shared with an FCA authorised specialist broker who will discuss cover and pricing with you directly.