Residents’ Management Companies & Right To Manage

What are Residents’ Management Companies (RMCs)?

Typically, an RMC (along with the freeholder) is a party to the lease, and the leaseholders are shareholders in the RMC.

When someone sells their apartment, their share will pass to the new owner. Residents can become directors of their RMC (usually on a volunteer basis) if they are nominated by other shareholders. 

The resident management company directors’ responsibilities are to manage the property on behalf of the freeholder and have control over service charge expenditures.  

RMCs do not own the freehold.

What is “Right to Manage” (RTM)?

Leaseholders can obtain the legal right to take over the management of the freehold through the right to manage procedure. When there is no RMC in place or when the leaseholders are dissatisfied with the management standard, RTM is frequently pursued.

As with anything, there are pros and cons to “right to manage.” An RTM has to adopt specific articles of association and must be a company limited by guarantee, and leaseholders are company members rather than shareholders. 

Similar to RMCs, when a member of an RTM company sells their flat, they must resign from the company, and the incoming flat owner takes their place.

Contact us to learn how Our Block and Estate Management Team can help you with your specific needs related to RMCs and RTM.