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Property and leasehold
If your RTM company is taking over management of a block, it usually takes over arranging the buildings insurance too, from the acquisition date, with no gap. Section 96 of the Commonhold and Leasehold Reform Act 2002 moves the landlord’s management functions, including insurance, to the company. Alongside buildings cover you will usually need common parts liability, directors’ and officers’ cover for the volunteer board, engineering inspection for lifts, and protection for service charge money.
Part of: RMC and RTM directors’ liability insurance
In short
An RTM company takes over the landlord’s management functions under the leases on the acquisition date, set by the claim notice or a later tribunal decision. Where the leases make the landlord insure, the company must have buildings cover in place from that day, based on a fresh reinstatement valuation rather than the landlord’s old figure. It also needs common parts liability, D&O for its directors, lift and plant inspection, employers’ liability if it employs anyone, and crime cover for funds held. Indicative terms can be obtained before the date is final.
Last reviewed 6 October 2026 by the Apex commercial team.
An RTM company does not buy the building. The landlord keeps the freehold; the company takes over the landlord’s management functions under the leases. Section 96 of the Commonhold and Leasehold Reform Act 2002 defines those as functions with respect to services, repairs, maintenance, improvements, insurance and management. So if your leases make the landlord responsible for insuring the building, that job becomes the company’s on the acquisition date.
Some things stay with the landlord: section 96(6) excludes re-entry and forfeiture, and matters concerning only a unit not held by a qualifying tenant. Section 97(3) lets anyone, the landlord included, still insure at their own expense. Approvals under the leases pass to the company, which must give the landlord notice before granting them.
| Cover | Who needs it | What to check |
|---|---|---|
| Buildings insurance on a reinstatement basis | The RTM company, where the leases put the insuring obligation on the landlord | Start date matches the acquisition date; sum insured based on a current rebuild valuation; whose interests the leases require to be noted |
| Property owners’ liability for the common parts | The RTM company, as the body now running hallways, stairs, grounds and car parks | Usually included with a blocks of flats policy; check the limit and that the company, not just the landlord, is the insured |
| Directors’ and officers’ liability | The volunteer directors personally, and the company | Cover for past directors; claims brought by members, who are usually the leaseholders |
| Employers’ liability | The company, if it employs anyone directly | Confirm how each person is engaged; an agent’s staff are the agent’s |
| Engineering inspection | Blocks with passenger lifts, communal boilers or other plant | A contract in place from day one, with reports going to the company |
| Fidelity or crime cover | Any company holding service charge or reserve funds | Whether it covers loss caused by a managing agent, not only by directors or employees |
| Professional indemnity | Companies whose directors handle funds, run consultations or give advice to members | Whether a D&O or blocks policy already includes a management liability section |
The leases decide who insures, which risks must be covered and how the premium is recovered through the service charge. Read them before asking for terms; if leases in the block differ, work to the strictest. For the directors’ side, see RMC and RTM directors’ liability insurance.
The statutory process fixes the acquisition date, and that is the date your insurance must be ready for.
| Step | What the 2002 Act says | What to do about insurance |
|---|---|---|
| Form the company (s.73) | An RTM company is a private company limited by guarantee whose articles state that acquiring and exercising the right to manage the premises is its object or one of them. | Ask for D&O terms now; directors are already deciding and spending. |
| Claim notice (ss.79 and 80) | Members must include qualifying tenants of at least half the flats (both, where there are only two qualifying tenants). The notice gives a counter-notice deadline at least one month away and an intended acquisition date at least three months after that deadline. | Start gathering building data and commission a reinstatement valuation. Ask for indicative buildings terms. |
| Counter-notice (s.84) | The landlord may admit or dispute the claim. If disputed, the company may apply to the tribunal within two months. | Tell the broker the date may move. |
| Acquisition date (s.90) | The date in the claim notice if undisputed; otherwise three months after a tribunal determination becomes final or after the landlord agrees in writing. | Bind cover to incept on this date and confirm in writing when the landlord’s cover ends. |
| Information (s.93) and contracts (s.92) | The company can require information it reasonably needs, but not before the acquisition date; compliance is due within 28 days. The landlord must notify existing management contracts to the contractor and the company. | Ask early for the current schedule, valuation, claims record and inspection reports, but plan for them arriving late. |
| Funds (s.94) | The landlord or manager must pay over accrued uncommitted service charges on the acquisition date or as soon after as reasonably practicable. Either side can ask the tribunal to fix the amount. | Put crime cover and bank controls in place before the money arrives. |
Section 93 cannot force the landlord to hand over the schedule or claims history before the acquisition date. Get what you can informally and tell the broker what is missing.
The buildings policy is the cover most likely to go wrong at transition, because two parties are each assuming the other has it. Plan for these points before the date arrives.
These examples are illustrative. They show the kinds of problem RTM companies meet in their first months, not real claims or outcomes.
Each is a gap between what the landlord did and what the company assumed was in place.
| Provision | What it says | Insurance relevance |
|---|---|---|
| Leasehold and Freehold Reform Act 2024, ss.49 to 52 | In force since 3 March 2025: buildings with up to 50% non-residential floor area can now qualify (previously 25%); an RTM company and its members are generally not liable for other people’s costs arising from a claim notice, subject to exceptions; disputes about compliance go to the tribunal. | More RTM companies will insure shops and offices beneath flats. |
| Building Safety Act 2022, ss.65 and 72 | A higher-risk building is in England, at least 18 metres high or with at least seven storeys, with at least two residential units. An accountable person includes someone under a lease or enactment to repair the common parts; a freeholder whose repairing obligations are functions of an RTM company is not an accountable person on that basis. GOV.UK guidance lists RTM companies among possible accountable persons. | An RTM company running a higher-risk building may carry building safety duties. Liability policies commonly exclude fines and penalties. |
| Employers’ Liability (Compulsory Insurance) Act 1969, s.1 | Employers carrying on business in Great Britain must insure against injury and disease to employees. GOV.UK says cover must be at least £5 million, with exemptions such as employing only family members. | Applies if the company directly employs a caretaker, cleaner or concierge. |
| Lifting Operations and Lifting Equipment Regulations 1998, reg. 9 | Employers must have lifting equipment for lifting persons thoroughly examined at least every six months where it is exposed to deterioration. | HSE says lifts provided for workers are within the regulations; where not, a similar regime may still be reasonably practicable and insurers may require it. |
| Pressure Systems Safety Regulations 2000, reg. 8 | The user of an installed pressure system must not operate it without a written scheme of examination. | Where they apply to communal plant, an engineering inspector usually provides the scheme. |
Further leasehold reforms are being brought in by stages, so check current GOV.UK guidance. The right to manage also applies in Wales, but the 2022 Act’s higher-risk building rules apply in England, and much of the Building Safety (Wales) Act 2026 was not in force when this page was reviewed.
Indicative terms can usually be prepared before the acquisition date is final if the brief covers these points:
Include any lease clause that requires particular risks or a sum insured, so terms can be checked against the lease, not just on price.
A complete proposal gets better terms than a bare one, and a broker can only present what you tell us. Have these ready:
Speak to a broker
RTM company cover, placed by a named broker
Send us your current schedule, or tell us about the property if you are arranging cover for the first time. Or leave your number and a named broker will call you back, usually the same working day.
Apex Insurance Brokers is an independent insurance broker based in Bristol, established in 2009 and authorised and regulated by the Financial Conduct Authority. We are not tied to one insurer: we work with over 30 markets, including Lloyd’s syndicates through wholesale brokers, and every client has a named broker who handles the placement, mid-term changes, certificates for clients and the renewal.
Only if the leases give the landlord the job of insuring. Section 96 of the Commonhold and Leasehold Reform Act 2002 moves the landlord’s management functions, including insurance, to the RTM company on the acquisition date. Read the insurance clause in each lease to confirm.
On the acquisition date, from the first minute of that day. Bind cover in advance and get written confirmation of when the landlord’s policy ends. A short overlap is usually manageable; a gap of even a few days can leave the company with an uninsured loss.
Yes. Section 97(3) of the 2002 Act allows any person to insure the premises at their own expense. That does not replace the insurance the leases require the RTM company to arrange, and the company should not rely on a policy it does not control.
No law requires it, but most volunteer boards want it. Directors decide on works, contractors and spending, and leaseholders who disagree can bring claims against them. D&O usually pays defence costs and damages for alleged wrongful acts, subject to the policy terms. Check that it covers former directors and claims by members.
Only if it employs someone directly, such as a caretaker or cleaner on its payroll. Then the Employers’ Liability (Compulsory Insurance) Act 1969 requires cover, which GOV.UK says must be at least £5 million. Staff employed by a managing agent are the agent’s responsibility, but confirm how each person is engaged.
Usually yes, as indicative terms. Insurers can price the building from its construction, size, occupancy, claims history and a rebuild valuation. Terms are valid for a limited period, so give the intended acquisition date and say whether the claim is disputed.
Apex arranges insurance for right to manage companies across England. Send us the building details and your acquisition date and we’ll find cover that fits the leases. Or call 0117 325 0027.
Start your quote Call 0117 325 0027Apex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority. Registered in England and Wales, company number 07014570. This page is general information, not advice on your individual circumstances. Cover is always subject to the insurer’s acceptance and the policy terms, and this page does not guarantee that cover will be available or on what terms.
