What Is an RMC? A Plain-English Guide for Leaseholders
You bought a flat. Somewhere in the legal paperwork, it mentions that you're a shareholder in a residents management company. Nobody explained what that means, and now you've been asked to become a director — or you've received a service charge demand from a company you didn't know you were part of.
An RMC (residents management company) is a company owned by the leaseholders in a block of flats that manages the building on their behalf. If your block has an RMC, every leaseholder is typically a shareholder, and the company's directors are responsible for maintaining the building and managing the service charge.
How an RMC works
An RMC is a private company limited by guarantee (or sometimes by shares), registered at Companies House. It was usually set up by the original developer when the block was built, and written into the lease as the party responsible for managing the building.
The ownership structure:
- Each flat typically corresponds to one share (or one membership) in the RMC
- When you buy a flat, the share transfers to you — this is usually handled by the conveyancing solicitor as part of the purchase
- You become a shareholder (member) automatically
- The RMC's directors — elected from among the shareholders — make day-to-day management decisions
What the RMC is responsible for:
- Collecting service charges from leaseholders
- Paying for building insurance, maintenance, cleaning, and communal utilities
- Organising repairs and planned maintenance
- Managing the reserve (sinking) fund for major future works
- Complying with fire safety, health and safety, and building regulations
- Filing a confirmation statement with Companies House
- Producing year-end service charge accounts
For a full breakdown of what directors actually do, see our guide to RMC director responsibilities.
RMC vs RTM: what's the difference?
These two terms are frequently confused because both result in leaseholders managing their own block. The key differences:
| RMC | RTM Company | |
|---|---|---|
| How it's created | Usually set up by the developer when the block was built | Created by leaseholders exercising their statutory Right to Manage under the Commonhold and Leasehold Reform Act 2002 |
| Why it exists | Built into the lease from day one | Leaseholders wanted to take over management (often because they were unhappy with the freeholder or managing agent) |
| Freeholder's role | Freeholder may or may not be involved — depends on the lease | Freeholder loses management functions but retains ownership of the freehold |
| Legal basis | Contractual (written into the lease) | Statutory (created under the 2002 Act) |
| Company type | Usually limited by shares or guarantee | Must be a company limited by guarantee |
In practice, the day-to-day work is identical. Whether your company is an RMC or an RTM company, the directors still need to budget, collect service charges, chase arrears, manage contractors, comply with Section 20 for major works, and produce year-end accounts.
If your block does not yet have an RMC and you're considering claiming RTM, see our detailed guide to the costs involved in an RTM claim — including company formation, professional fees, and what changed under the 2024 Act.
What RMC membership means for you as a leaseholder
You're a shareholder, not just a tenant
As a shareholder, you have rights that ordinary tenants don't:
- Voting rights — you can vote on major decisions at the AGM, elect directors, and influence how your building is run
- Access to information — the RMC must share service charge accounts and make financial records available for inspection
- Right to challenge — if you disagree with how service charges are being spent, you can challenge their reasonableness at the First-tier Tribunal (Property Chamber)
You're also subject to obligations
- Service charge liability — your lease specifies the percentage of total costs you're responsible for. The RMC issues demands and you must pay them. If you don't, the RMC can pursue arrears through the tribunal or courts. See our guide on service charge arrears and the recovery process
- Share transfer on sale — when you sell your flat, the RMC share must transfer to the buyer. Your solicitor handles this, but delays can hold up the sale if the RMC's records aren't up to date
- Potential director duty — someone has to run the company. If nobody volunteers, the RMC can't function, which creates problems for everyone (see below)
Common RMC issues
Nobody wants to be a director
This is the single most common problem for RMCs. The work is unpaid, time-consuming, and requires skills most leaseholders don't have — bookkeeping, contractor management, compliance with the Landlord and Tenant Act 1985, and Companies House administration.
If no directors are appointed and the company doesn't file its confirmation statement, Companies House will eventually start strike-off proceedings. A struck-off RMC creates a serious legal mess — the company that's supposed to manage the building and hold insurance no longer exists, which can block property sales.
For more on these challenges, see our guide to common problems facing residents management companies.
The managing agent question
Many RMCs appoint a professional managing agent to handle day-to-day operations. This costs £60-200+ per block per month but takes the workload off volunteer directors. The RMC board still makes major decisions and approves budgets — the agent handles execution.
The alternative is full self-management, where directors do everything themselves. This is cheaper but requires more time and knowledge. Most small blocks (under 15 flats) that have taken over management do it themselves because the agent's fee is a significant proportion of the total service charge budget.
Section 20 compliance
If the RMC needs to carry out major works costing more than £250 per leaseholder, it must follow the Section 20 consultation process — a three-stage procedure with 30-day notice periods. Our Section 20 consultation guide and step-by-step flowchart cover this in detail. The free Section 20 Timeline Calculator maps out every deadline.
What to do if you've just joined an RMC
If you've just bought a flat in a block with an RMC:
- Check that your share has been transferred — ask the company secretary or your solicitor
- Find out who the current directors are (search the company on the Companies House register)
- Ask for a copy of the most recent service charge accounts
- Attend the next AGM — or ask when one is scheduled
If you've been asked to become a director:
Read our RMC director responsibilities guide before deciding. The role involves real legal obligations — directors of an RMC have the same duties as directors of any other company under the Companies Act 2006.
LevyBoard is building block management software specifically for volunteer RMC and RTM directors — guided service charge accounting, arrears tracking, and compliance workflows at a price that works for self-managed blocks.
This guide covers residents management companies in England and Wales. This is general guidance, not legal advice.
Sources
- Commonhold and Leasehold Reform Act 2002, Part 2 Chapter 1 — Right to Manage provisions
- Section 18, Landlord and Tenant Act 1985 — meaning of "service charge"
- Section 20, Landlord and Tenant Act 1985 — consultation requirements for qualifying works
- First-tier Tribunal (Property Chamber) — tribunal for service charge disputes
- Companies House register — search for your RMC's details
Stop managing your block with spreadsheets
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