Becoming a Director of a Residents Management Company or Right to Manage Company
At some of the developments that Realty Manage, Residents benefit from membership to a ‘Residents Management Company’ (RMC) or ‘Right to Manage’ Company (RTM), which is run by volunteer resident Directors on behalf of all owners/residents.
As with any company, a Management Company Director helps control the company and has the power to make decisions. Directors are also burdened with the statutory and fiduciary duties of running that company. In the main, the Directors’ role is to ensure that the development is managed and maintained to an appropriate standard, cost effectively, and in line with the requirements of the documentation under which each property is demised.
Most Directors of Management Companies choose to discharge their duties to a professional managing agent such as Realty. This mitigates liability and ensures that all services are delivered with demonstrable value for money, to high standards, and in complete compliance with title documentation, legislation and best practice. The Director’s obligations are reduced dramatically to high level decision making, as the managing agent performs all of the day-to-day functions, however complete control always remains with the Directors.
Even where a managing agent is involved, Directors should meet regularly to discuss and agree how the development should be run, any planned projects, agree budgets and review the managing agents’ reports. Realty can also act as Company Secretary for the Management Company and perform all associated duties free of charge to further reduce the burden on the Directors.
Should you wish to become a Director, this can be done a number of ways. You can either be voted in at the annual AGM, or nominated by a current director. Once approved, the new director must fill out an AP01 form and submit this to their Managing Agent to be updated on Companies House.
There are no qualifications required to be a Director of an RMC, however you will be required to be a property owner or leaseholder (as defined on the Land Registry Title). The Memorandum and Articles of Association include rules about who can and can’t become a director and this will be unique to each development.