RTM counter-notices: what to do when your freeholder pushes back

You have done the work. You have incorporated the RTM company, served the notice inviting participation, and served the claim notice on the freeholder. Now you wait. The freeholder has one month to respond.

For many RTM companies, the response — when it comes — is an admission: a counter-notice confirming that the claim is valid and that management will transfer on the proposed acquisition date. For others, the response is a dispute. And for some, silence — which is, in legal terms, an admission too.

Understanding what a counter-notice is, what grounds a freeholder can use to dispute your claim, and how the process unfolds from there is essential to navigating this stage with confidence.

The counter-notice: what it is and when it must arrive

After receiving a valid claim notice, the landlord (and any other party who was served) has exactly one calendar month in which to serve a counter-notice. That deadline is calculated from the date the claim notice was served.

A counter-notice must do one of two things:

• Admit the claim — confirming that the RTM company is entitled to acquire management functions on the proposed acquisition date.
• Dispute the claim — asserting that the RTM company is not entitled to acquire management functions, and stating which prescribed ground or grounds of dispute apply.

A landlord cannot serve a counter-notice that simply says "we don't want to hand over management" or "we think our managing agent does a good job." The grounds for disputing an RTM claim are limited by statute. They essentially amount to: the claim is legally defective in some way. Common grounds include:

• The building does not qualify (for example, more than 50% non-residential floor space, or it is not a self-contained building)
• The RTM company does not have sufficient qualifying tenants in membership (the 50% participation threshold is not met)
• The claim notice itself was defective (missing required content, incorrectly served, or served prematurely)
• Some of the flats listed as held by qualifying tenants are not in fact held by qualifying tenants

Notice what is absent from this list: the freeholder cannot dispute the claim on the grounds that the current management is good, that the leaseholders are inexperienced, or that change would be inconvenient. RTM is a no-fault right, and the absence of a fault-based ground is intentional.

If no counter-notice is served: deemed admission

If the one-month deadline passes and no counter-notice has been served, the claim is deemed admitted by operation of law. The RTM company does not need the freeholder's active agreement or any further court or tribunal order. The acquisition proceeds on the date stated in the claim notice.

This deemed admission provision is an important protection. It means that a freeholder who simply ignores the claim, or who delays responding in the hope that the RTM company will give up, loses the opportunity to dispute. Silence is not a defence.

In practice, it is worth tracking the counter-notice deadline carefully and keeping clear records of service. If the deadline passes and you have not received a counter-notice, you can proceed on the basis that the claim is admitted — but make sure your service records are solid, because a landlord who later claims they never received the notice can complicate matters.

If the claim is disputed: the First-tier Tribunal

Where a landlord does serve a counter-notice disputing the claim, the RTM company has a route to challenge that dispute through the First-tier Tribunal (Property Chamber). The RTM company must apply to the tribunal within a specified period — typically two months after receiving the counter-notice — or the right to proceed may be lost.

The tribunal will consider whether the dispute is well-founded. It will look at the grounds stated in the counter-notice and assess whether they are made out on the facts. If the tribunal finds in the RTM company's favour, it will determine that the company is entitled to acquire management, and the process continues. If it finds against the company, the claim fails.

This is litigation, and it should be approached as such. A solicitor experienced in residential leasehold and RTM matters should be instructed as soon as a disputed counter-notice arrives. The arguments that succeed and fail at tribunal are fact-specific and legal-technical; this is not territory to navigate without professional help.

How solid preparation pre-empts disputes

The best way to deal with a disputed counter-notice is to have prepared so thoroughly that the grounds for dispute simply do not exist. Practically, this means:

Verify eligibility before you start. Before incorporating the RTM company, confirm that the building qualifies — self-contained, at least two-thirds qualifying tenants, non-residential floor space within the 50% limit (as updated from 3 March 2025), and at least two flats. Do not assume; check.

Verify participating leaseholders carefully. The 50% participation threshold requires that qualifying tenants of at least half the flats are RTM company members. Check that each member is indeed a qualifying tenant — that their lease was originally granted for a term exceeding 21 years, and that it is the kind of lease that counts. Errors here are a common source of disputes.

Get the claim notice right. As discussed in our earlier article on serving the claim notice, the content and service requirements are strict. A defective claim notice is a gift to a freeholder looking for grounds to dispute. Use a solicitor to draft or review the notice before it is served.

Document everything. Serve notices by a method that gives you evidence of receipt. Keep dated records of every step. If a dispute arises later, your records are your defence.

A freeholder who receives a well-prepared claim — clear eligibility, correct membership, a compliant notice, served correctly — has very little to work with. The prescribed grounds for dispute are narrow, and a claim that ticks all the boxes is difficult to challenge successfully.

The costs position after 3 March 2025

One of the most significant changes introduced by the LFRA 2024 (in force from 3 March 2025) concerns costs. Under new sections 87A and 87B of the CLRA 2002:

In a non-contentious claim — broadly, where the claim proceeds without a dispute being taken to tribunal — the RTM company is no longer liable for the landlord's process costs. This reverses the previous position, under which leaseholders pursuing RTM routinely had to meet the freeholder's legal and surveyor fees even when their claim was valid and uncontested. That cost burden was widely regarded as an unfair deterrent to RTM, and its removal is a meaningful improvement for leaseholders.

Where the RTM company withdraws the claim or the claim is deemed withdrawn, the tribunal can order costs. This matters: if you serve a claim notice and then withdraw it — whether because you have changed your mind, lost confidence in the eligibility analysis, or for any other reason — you may find yourself liable for the freeholder's costs of responding to the claim up to that point.

Where the RTM company has acted unreasonably, the tribunal also has discretion to award costs against it. The principle is that costs protection is available for good-faith, properly-grounded claims pursued to completion — not for careless or reckless conduct.

The practical message is: prepare carefully, pursue your claim seriously, and if you realise there is a problem with your claim, take legal advice before withdrawing. Do not serve a claim notice unless you are confident the claim is properly founded. The protection from the freeholder's costs is a significant benefit that attaches to a legitimate, well-conducted claim.

What to do when the counter-notice arrives

If you receive a counter-notice disputing your claim, the immediate priorities are:

1. Read it carefully. What specific ground or grounds is the landlord relying on? Understanding the basis of the dispute is the starting point.

2. Instruct a solicitor promptly. The window for applying to the tribunal is limited. Do not let time pass while you deliberate.

3. Gather your evidence. The tribunal will need evidence on the facts. Who are the qualifying tenants? What is their lease length? How was the claim notice served? Build your evidential file.

4. Do not respond to the counter-notice without advice. Any communications you send at this stage can have consequences. Let your solicitor manage the correspondence.

5. Communicate with your co-members. Other members of the RTM company need to know what is happening and what the plan is. A disputed counter-notice is stressful; transparency and a clear plan help maintain confidence.

Reeve will flag when a counter-notice arrives and track the deadline for applying to the tribunal, but at this point the substantive work is with a qualified solicitor. Reeve is an information and tools platform, not a litigation service — and this stage of the process needs a specialist.

After a successful outcome at tribunal

If the tribunal determines in your favour — finding that the counter-notice was unjustified and the claim is valid — the process continues towards the acquisition date. The tribunal's determination effectively replaces the admission that would have come from the counter-notice.

It is worth noting that a tribunal determination in your favour does not necessarily mean the acquisition date in your original claim notice is still valid; the date may need to be recalculated following the length of the dispute. Your solicitor can advise on the correct position.

Reassurance: most claims are not contested

To put all of this in perspective: the majority of RTM claims do not result in a disputed counter-notice. Where a claim is well-prepared and the building clearly qualifies, many freeholders — after taking their own legal advice — simply accept the inevitable and either admit the claim or let the deadline pass. The dispute mechanism exists because statute requires it to exist, not because disputes are the norm.

The effort invested in thorough preparation at the outset — verifying eligibility, getting membership right, preparing notices carefully — is precisely what reduces the likelihood of a dispute. It is the best use of your time and your RTM company's resources.

FAQ

Can a landlord serve a counter-notice after the one-month deadline?

No. A counter-notice served after the one-month deadline has no legal effect. If the deadline has passed without a valid counter-notice, the claim is deemed admitted.

What if the counter-notice admits the claim but disputes the acquisition date?

A counter-notice that admits the claim but objects to the acquisition date is, in principle, still an admission of entitlement. The specific rules on acquisition date disputes are technical; take advice if this situation arises.

Can we continue to an acquisition after winning at tribunal without further court orders?

Generally yes — a tribunal determination in your favour means you proceed to acquisition on the revised acquisition date. But the exact steps depend on the terms of the tribunal's determination. Your solicitor will guide you.

What if the freeholder sells the freehold after receiving the claim notice?

RTM claims bind successors in title in certain circumstances. The rules are technical, but a change of freeholder mid-claim does not automatically extinguish the claim. Take advice promptly if this happens.

We won at tribunal. Can we recover our legal costs from the freeholder?

In general, each party bears their own costs in RTM proceedings, subject to the tribunal's discretion to award costs in cases of unreasonable conduct. Winning at tribunal does not automatically mean you recover your solicitor's fees. The costs regime is fact-specific; ask your solicitor before proceedings begin.

Is there a time limit on how long after a failed claim we have to wait before trying again?

Yes. Where a claim has been withdrawn, deemed withdrawn, or determined against the company, there are restrictions on bringing a further claim within a specified period. The exact period depends on the circumstances; take advice before assuming you can immediately restart.

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For further guidance on RTM, the First-tier Tribunal (Property Chamber) publishes information on how tribunal proceedings work, and LEASE offers a free helpline for leaseholders at every stage of the process.