What Is Block Management? A Guide for New RTM Directors

Your RTM company just took over management of your block. The managing agent has been dismissed, the handover files have arrived (or haven't), and someone needs to actually manage the building. That someone is you.

Block management is the collective term for everything involved in running a residential block of flats — the finances, the maintenance, the legal compliance, and the communication with leaseholders. When a professional managing agent does it, they charge £60-200+ per month. When your RTM or RMC does it, volunteer directors do the same work for free.

This guide explains what block management actually involves, broken down into the specific tasks you'll be handling.

The five areas of block management

1. Financial management

The core of block management is collecting money from leaseholders and spending it on the building. This involves:

Service charge budgeting. Before each financial year, directors set an annual budget covering insurance, maintenance, cleaning, utilities, health and safety compliance, and a reserve fund contribution. Each leaseholder pays a share determined by the percentage in their lease.

Demand generation and collection. You issue service charge demands (quarterly or annually) and track payments. Under Sections 47–48 of the Landlord and Tenant Act 1987, every demand must include the landlord's name and address — without this, the demand is not valid. Use our free Service Charge Demand Generator to calculate shares and produce compliant demands.

Arrears recovery. When leaseholders don't pay, you need a structured process: reminder, formal letter, pre-action notice, and eventually tribunal or court. See our arrears recovery guide for the full process, and use our Arrears Letter Generator for correctly formatted chase letters.

Year-end accounts. At the end of each financial year, you produce an income and expenditure statement showing what was collected, what was spent, and the reserve fund balance. The RICS Service Charge Residential Management Code sets out the recommended format. Our service charge accounting guide walks through the full annual cycle.

2. Building maintenance

You're responsible for keeping communal areas in good condition — hallways, stairwells, external walls, the roof, gardens, parking areas, and any shared equipment (lifts, entry systems, communal boilers).

Reactive maintenance covers repairs: a broken light, a leaking pipe, a damaged door. You need a list of reliable contractors, and you need to get quotes, supervise work, and check it's done properly.

Planned maintenance is the bigger challenge. Buildings need cyclical work — external decoration every 5-7 years, roof replacement every 25-40 years, lift refurbishment, window replacement. Planning (and saving) for these costs is what the reserve fund is for.

The Section 20 threshold. Any maintenance work costing more than £250 per leaseholder triggers a mandatory consultation process under Section 20 of the Landlord and Tenant Act 1985. This is a three-stage process with minimum notice periods, and skipping it means you can only recover £250 per leaseholder regardless of the actual cost. Our Section 20 consultation guide and free Timeline Calculator cover this in detail.

3. Legal and regulatory compliance

Running a block involves specific legal obligations:

• Companies House filing. Your RTM or RMC is a company limited by guarantee. You must file a confirmation statement annually (£50 online) and notify Companies House of director changes within 14 days. Miss the confirmation statement and Companies House will start the strike-off process — which freezes property sales in the block.
• Health and safety. Fire risk assessments (legally required), emergency lighting tests, fire alarm servicing, legionella risk assessments for water systems, asbestos surveys for pre-2000 buildings. These aren't optional — they're legal requirements under the Regulatory Reform (Fire Safety) Order 2005 and other regulations.
• Insurance. Buildings insurance is typically required by the leases. Directors should also consider directors' and officers' (D&O) liability insurance — it protects you personally if a decision you make as director leads to a claim.
• Data protection. If you hold leaseholder contact details, you're processing personal data under UK GDPR. For a small block this is straightforward, but you should have a basic privacy notice.

4. Communication and governance

Leaseholders are both the customers and the shareholders of your management company. Keeping them informed prevents disputes:

• AGMs. Annual general meetings give leaseholders a voice. Even if your lease doesn't strictly require one, holding an AGM builds trust and gives directors a mandate for major decisions.
• Budget transparency. Circulate the annual budget with a clear breakdown by category before issuing demands. Leaseholders who understand what they're paying for are less likely to dispute charges.
• Works notifications. When maintenance is planned, tell leaseholders what's happening, when, and how much it will cost. Surprises cause complaints.
• Dispute handling. Leaseholders can challenge service charge reasonableness at the First-tier Tribunal (Property Chamber). Understanding this process — and keeping records that demonstrate your charges are reasonable — is your best protection.

5. Contractor and supplier management

Unless a director happens to be a builder, you'll need external contractors for most maintenance work. Effective contractor management means:

• Getting at least three quotes for any significant work
• Checking insurance certificates (public liability, employers' liability)
• Putting scope, price, and completion dates in writing
• Inspecting work before final payment
• Building relationships with reliable tradespeople — a good electrician, plumber, roofer, and decorator who know your building saves time on every job

What block management is NOT

It's not property letting. Block management is about maintaining the building and managing the service charge — not about finding tenants, setting rents, or handling tenancy agreements. If individual leaseholders rent out their flats, that's their responsibility (subject to any lease restrictions on subletting).

It's not optional. If your RTM company has exercised the right to manage under the Commonhold and Leasehold Reform Act 2002, you are the manager. The legal obligations exist whether or not you have the time, training, or tools to handle them.

It's not one person's job. Sustainable block management requires distributing tasks among directors. One person handling finances, maintenance, compliance, and communication will burn out — and when they resign, everything falls apart. See our guide on RMC director responsibilities for how to split the workload.

How volunteer directors actually manage blocks

The honest answer: most volunteer directors cobble together spreadsheets, Word templates, shared folders, and a WhatsApp group. It works until it doesn't — until arrears pile up, a Section 20 consultation goes wrong, or year-end accounts need producing and nobody knows how.

The gap between what professional managing agents use (dedicated software, trained staff, established processes) and what volunteer directors have access to (nothing, essentially) is the core challenge of self-managed blocks.

LevyBoard is building guided block management software specifically for volunteer directors — service charge accounting, arrears tracking, Section 20 compliance, and year-end accounts, all designed for people who didn't sign up to become property managers.

This guide covers block management for residential leasehold properties in England and Wales. Scottish and Northern Irish property law differs significantly. This is general guidance, not legal advice.

Sources

• Section 20, Landlord and Tenant Act 1985 — consultation requirements for qualifying works
• Section 21B, Landlord and Tenant Act 1985 — service charge demand requirements
• Commonhold and Leasehold Reform Act 2002, Part 2 Chapter 1 — Right to Manage provisions
• Regulatory Reform (Fire Safety) Order 2005 — fire safety obligations
• RICS Service Charge Residential Management Code — best practice for service charge accounting
• First-tier Tribunal (Property Chamber) — tribunal for service charge disputes