What is a Residents’ Management Company?
A Residents’ Management Company (RMC) is a limited company set up to manage a building containing flats, or an estate containing freehold houses. In most cases the property owners or leaseholders are members or shareholders of the company.
The RMC is normally set up by the original developer to enable to ongoing management of the building and/or communal areas, and it some instances the freehold of the development will transfer to the RMC when the last unit is sold.
An RMC can also be written into a lease where the freehold is retained by the developer. The RMC would have management obligations such as insurance, maintenance, compliance and collection and accounting for service charges. In most instances, an RMC will employ a professional managing agent (like us) to run and manage the development.
What are RMC Directors?
RMC directors are members of the company who are appointed by the leaseholders/owners to make decisions on behalf of the company. It is normally an unpaid position.
To be eligible to be a director, you must:
- Be an owner/leaseholder within the development (this is often a requirement, but check your Mem & Arts to confirm)
- Over the age of 16
- Not be an undischarged bankrupt
- Not be a disqualified director whose term of disqualification has not yet been spent
- Not be the auditor of the company
What are the obligations of an RMC Director?
As a limited company registered in the UK, the Company and its Directors must abide by company law. The general principles that must be abided by are:
- Follow the rules of the company (known as the “Memorandum and Articles”)
- Decisions must always be made for the benefit of the company rather that the individual
- Promote the success of the company at all times
- Complete statutory filings and returns
- Maintain the statutory books
- Ensure the statutory accounts are an accurate representation of fact
- Disclose any conflicts of interest to other directors immediately
In addition, as an RMC director, there are a few other responsibilities:
- Be available to liaise with your managing agent and other directors on management matters
- Discussing and approving the annual service charge budget
- Ensuring the service charge accounts are an accurate representation of fact
- Ensuring that all decisions or actions taken are within the bounds of the lease
- Ensuring that all Health, Safety and Fire obligations are met
- Ensuring the insurance cover is valid and adequate
- Attendance at 1to 2 board meetings per year, or as required
- Attendance at AGM
- Willingness to be involved with on-site issues
Do I need any experience?
In short, no. You need a willingness to be involved in the proactive management of your building or estate; the rest you can leave in our hands. As professional managing agents with a proven track record, we can make your life as an RMC director easy and stress free.
What are the benefits?
As an RMC director, you will gain an insight into how your block or development runs. You will be involved in decisions relating to the service charge budget and mangement of the site. You will have more input over the service charge budget and the selection of the managing agent who is ultimately responsible for the day to day running of the development.
How do I become a director?
Each company will specify how directors are appointed with its Memorandum and Articles. Often, directors can be appointed by being proposed and seconded by existing directors. At other times, you will need to wait for the next AGM to be appointed. You can view the Memorandum and Articles of your RMC by clicking this link and searching for your company.
For more information on becoming an RMC director, use the contact form below to contact us today.