A residents' management company (RMC) is a company owned by the flat owners or homeowners that is responsible for managing their block or estate under the leases or transfers. Its directors are volunteers from among the owners; most appoint a managing agent to run the day to day while the board keeps the decisions.
A residents' management company, or RMC, is a company set up to own or manage the shared parts of a block or an estate, usually with the leaseholders or homeowners as its members. The leases or transfers oblige it to repair, insure and manage the building or the estate, and oblige each owner to pay their share. Its directors are volunteers, usually owners themselves.
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01What the directors are responsible for
- The obligations in the leases or transfers: repairs, insurance, cleaning, the shared services, and on an estate the roads, open space and drainage the company holds.
- The money: a budget, the service charge or estate charge, a client account held on trust, and accounts each year.
- Safety: the fire risk assessment and its actions, and the rest of the compliance diary for the shared parts.
- The company: the confirmation statement and accounts at Companies House, the register of members, board meetings and the annual general meeting where the articles require one.
02RMC or RTM?
An RMC is created by the developer and written into the leases or transfers from the start. A right to manage company is formed later by leaseholders to take the management over from a freeholder. Both appoint a managing agent in the same way, and we manage both on the same published fees.
03How a managing agent helps
The directors stay responsible, but the work is delegated. On full management we run the building, the money and the company paperwork, with four visits a year and a named manager, from £240 a flat a year. Boards that run the building themselves use Director Desk from £895 a year for the accounts, demands, compliance diary and Companies House filings. Our fees.
04When the developer still controls it
On new estates the developer usually holds the RMC until the homes are sold, then hands it to the owners. If control has not passed years after the last completion, ask the developer in writing when it will. We run that handover on estates across Essex.
05Questions
What is a residents' management company?
A company, usually owned by the leaseholders or homeowners, that is responsible for managing and maintaining the shared parts of a block or estate under the leases or transfers.
Are RMC directors personally liable?
Directors have the ordinary duties of any company director. Most RMCs hold directors' and officers' insurance, and a managing agent keeps the records that show the duties were met.
Does an RMC have to file accounts?
Yes. It files a confirmation statement and accounts at Companies House each year, like any company.
How does a residents' management company work?
Each owner is usually a member. The members appoint directors, who run the company: they set the budget, appoint the managing agent and contractors, and make decisions on repairs and insurance. The company must file accounts and a confirmation statement at Companies House every year.
What does an RMC director do?
Makes decisions for the building with the other directors, keeps the company's filings up to date, approves the budget and major spending, and oversees the managing agent. A good agent does the paperwork; the director's job is the decisions.
Can residents change their management company's agent?
Yes. The directors of the residents' management company can end the managing agent's agreement on its notice terms and appoint another firm.
Does an RMC pay tax?
An RMC holding service charge money on trust for the owners usually has little or no taxable profit, but it must still file accounts, and any interest earned or income from things like phone masts may be taxable. Your accountant should confirm the position for your company.
06Guides for directors
- Service charge estimate
- RICS regulated block managers in Essex
- The reserve fund
- Service charge arrears
- Service charge accounts
- Directors' duties in an RMC
- How to choose a managing agent
- A free service charge check
- Service charges explained
- Buildings insurance for blocks
- Fire safety in blocks of flats
- The Directors' Library
- What is block management?
- How to change managing agent
- Right to manage
- Block management fees
- Section 20 major works
- Service charge disputes
- New-build estate fees
- Estate management in Essex