What Are the Responsibilities of an RMC Director?

You've been elected as a director of your block's Resident Management Company. Congratulations — and condolences. You've just inherited a set of legal, financial, and regulatory obligations that most professional managing agents charge £60–200/month to handle.

Understanding what you're responsible for — and what you're not — is the first step to managing your block without burning out or exposing yourself to liability.

This guide covers every key responsibility for RMC and RTM directors in England and Wales, in plain English.

What is an RMC director?

A Resident Management Company (RMC) is a company — usually limited by guarantee — formed by the leaseholders in a block of flats to manage the building. An RTM (Right to Manage) company is similar but is specifically created under the Commonhold and Leasehold Reform Act 2002 to take over management from a landlord or professional agent.

As a director of either type of company, you have two overlapping sets of duties:

Company law duties — as a director of a limited company registered with Companies House
Leasehold management duties — as the party responsible for maintaining the building and collecting service charges under the terms of the leases

Company law duties

Under the Companies Act 2006, every company director must:

Act within their powers — follow the company's Articles of Association and make decisions at properly constituted board meetings
Promote the success of the company — act in the interest of the members (leaseholders) as a whole, not in your own interest
Exercise independent judgement — don't simply defer to one dominant director or an external adviser without applying your own assessment
Exercise reasonable care and skill — you're not expected to be a property professional, but you are expected to be diligent
Avoid conflicts of interest — if you're a plumber and the block needs plumbing work, declare your interest and recuse yourself from the decision
Not accept benefits from third parties — no kickbacks from contractors
Declare interests in proposed transactions — if a decision could benefit you personally, disclose it to the other directors

Personal liability: Directors can be personally liable for breaches of these duties. Directors' and officers' (D&O) insurance is strongly recommended — it typically costs £150–400/year for a small block and protects individual directors against personal claims.

Building management duties

Service charge budgeting and collection

You're responsible for:

Setting an annual service charge budget covering all anticipated costs (insurance, maintenance, cleaning, management, reserve fund contributions)
Calculating individual leaseholder contributions based on the lease percentage splits
Issuing valid service charge demands (compliant with Sections 47–48 of the Landlord and Tenant Act 1987). Use our free service charge demand generator to create compliant demands.
Collecting payments and tracking who has paid
Chasing arrears within the 18-month statutory deadline
Producing year-end service charge accounts following RICS/ICAEW guidance

Building maintenance

You must keep the building in good repair as required by the leases. This typically covers:

Structural elements — roof, external walls, foundations
Common parts — hallways, staircases, lifts, communal gardens
Building services — communal heating, lighting, entry systems
Health and safety — fire safety (fire risk assessment, escape routes, alarm testing), asbestos management, gas safety for communal systems, legionella risk assessment

You don't need to do the work yourself — but you do need to arrange it, supervise it, and pay for it from the service charge fund.

Section 20 consultation

Before carrying out works costing more than £250 per leaseholder, you must follow the Section 20 consultation process. This is a three-stage statutory process with consultation periods (minimum 30 days at Stages 1 and 3).

Missing any step can cap the recoverable cost at £250 per leaseholder — regardless of the actual expenditure.

Insurance

You must arrange adequate buildings insurance for the block. Most leases specify the minimum cover required. Check:

Is the rebuild value up to date?
Does the policy cover all the risks specified in the lease?
Is the excess reasonable?
Are all leaseholders named or notified?

Companies House compliance

As a limited company, your RMC must:

File a confirmation statement annually (£50 online, or £110 on paper)
File accounts (which may qualify as dormant accounts depending on the company's structure and accounting treatment — confirm with your accountant)
Keep the registered office address up to date
Maintain a register of members (all leaseholders who are members of the company)
Notify Companies House of any changes to directors (appointments, resignations, change of address)

Missing the confirmation statement deadline can result in the company being struck off the register — which creates serious legal problems for the management of the block.

Leaseholder communication

While not always a legal requirement, good communication prevents disputes:

Hold an Annual General Meeting (AGM) — most Articles require this
Share the annual budget and accounts with all leaseholders
Notify leaseholders of planned works and their estimated cost
Respond to leaseholder queries within a reasonable timeframe
Keep minutes of board meetings and make them available

What you're NOT responsible for

Individual flats — the interior of each flat is the leaseholder's responsibility (unless the lease says otherwise)
Neighbour disputes — you can enforce lease covenants (noise, subletting) but you're not a mediator
Legal advice — you're expected to seek professional advice for complex issues, not to be a solicitor
Professional-grade management — volunteer directors are held to a standard of reasonable care, not the standard of a qualified surveyor

Practical tips for new directors

Get D&O insurance — it's cheap relative to the personal risk
Set up a dedicated bank account — never mix block funds with personal accounts
Document everything — decisions, spending approvals, maintenance reports, leaseholder communications
Build a calendar — Companies House deadlines, insurance renewals, gas safety checks, fire risk assessment reviews
Don't go it alone — split responsibilities among directors. One handles finances, one handles maintenance, one handles compliance
Know when to get help — a solicitor for lease interpretation, an accountant for year-end accounts, a surveyor for major works

Sources

This guide applies to England and Wales. Scottish and Northern Irish leasehold law differs significantly. This is not legal advice — seek professional guidance for your specific situation.