RTM Companies

The RTM has to be exercised through an RTM company which must be a private company limited by guarantee (sections 73 and 122, CRLA 2002).

Section 73 specifies what an RTM company is. In addition to the requirement that the company must be a private company limited by guarantee, its articles of association must state that its object, or one of its objects, is the acquisition and exercise of the RTM the premises.

A company is not an RTM company if:

  • It is a commonhold association (section 73(3), CLRA 2002)
  • An RTM company already exists in relation to the premises or to any premises containing or contained in the premises (section 73(4), CLRA 2002)
  • The freehold of any premises is transferred to a company which is an RTM company in relation to the premises, or any premises containing or contained in the premises; it ceases to be an RTM company when the transfer is executed (section 73(5), CLRA 2002).

Written by James Naylor

Partner, Naylor Solicitors LLP.

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