What is a Residents' Management Company (RMC)?
A Residents' Management Company (RMC) is a company — usually named as a party in the lease — through which the leaseholders collectively manage their building and its service charges. The leaseholders are typically the shareholders or members and appoint directors, and the RMC often appoints a managing agent to do the day-to-day work.
In many blocks of flats, the lease does not leave management in the freeholder's hands. Instead it names a Residents' Management Company as the party responsible for repairing, insuring and servicing the building, and for setting and collecting the service charge. The leaseholders are the company's members, so — at least in principle — the people who pay the charges are also the people who control how the money is spent.
How an RMC is structured
An RMC is a normal company registered at Companies House, usually limited by guarantee or by shares. Each flat typically comes with membership of the company, so buying the flat makes you a member and selling it passes that membership on. The members elect a board of directors — unpaid leaseholder volunteers — who take the decisions and sign off the accounts. Because directors are rarely property professionals, most RMCs appoint a managing agent to run the building day to day, issue demands and prepare the service charge accounts.
RMC vs Right to Manage
The two are easily confused because both put leaseholders in charge. The difference is timing and origin:
- An RMC is normally set up when the block is built or the leases are first granted. It is baked into the lease from the start as the responsible party.
- Right to Manage (RTM) is a statutory right under the Commonhold and Leasehold Reform Act 2002 that leaseholders acquire later — typically to take management away from a freeholder or their agent.
If your lease already names an RMC that the residents control, you generally do not need RTM: you already have the management. RTM is the tool for blocks where the freeholder, not the leaseholders, currently holds the reins.
Being a director of your RMC
If you sit on the board, you carry real responsibilities: keeping proper accounts, holding service charge money on trust, consulting on major works under Section 20, and filing at Companies House. Getting the numbers right protects both the building and you personally — which is exactly where an independent line-by-line check of the charges is useful.
How this shows up in your service charges
Running an RMC — or paying into one — you want confidence the charges stack up. Our free AI audit reads your service charge demand, accounts and lease and shows you, line by line, how much could be challengeable under the Landlord and Tenant Act 1985. Managing a whole block? See ServiceCharges.AI for Blocks for portfolio-level analysis.
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