By Laura Street, Associate Director, Pure Block Management (York)
If you are a leaseholder at a shared residential development there may come a time when you become involved in either a Residents’ Management Company (RMC), or Right to Manage (RTM) Company, to give you greater control of its running.
These are usually limited companies formed to manage and administer the service charge and subsequent maintenance of a development, which gathers funds from leaseholders, held in trust, for the property owners.
It sees funds collected to cover insurance and essential maintenance and repairs of shared or communal areas and facilities, such as entrances, hallways, staircases, gardens, pathways, car parks, lighting, boundary walls, fences, and shared landscaping.
At Pure Block Management, we know people have lots of questions about the responsibilities, duties and liabilities which come with being a Residents’ Management Company or Right to Manage Company director, and so have produced the following short FAQ to help.
What is the role of a Residents’ Management Company Director?
Directors are appointed from among the property owners (members or shareholders) and are generally volunteers who are not paid for their time.
Their input is however invaluable in maintaining standards and protecting the interests of all residents.
A director’s primary purpose is to represent the collective interests of all leaseholders, ensuring the property is managed responsibly, transparently, and in line with all relevant legislation.
Typical commitments can include:
- Attending up to four board meetings per year and the Annual General Meeting (AGM).
- Being available via email to approve quotations and make decisions between meetings.
- Working collaboratively with the appointed managing agent to:
Set annual maintenance priorities
Approve service charge budgets
Address payment arrears or maintenance issues
What are the legal responsibilities of a Residents’ Management Company Director?
Under the Companies Act 2006, directors must comply with several key duties and must:
- Act within powers: Follow the company’s Articles and act only for proper purposes.
- Promote the success of the company: Make decisions in good faith for the benefit of all members collectively.
- Exercise independent judgement: Avoid being unduly influenced by others.
- Avoid conflicts of interest: Refrain from involvement in situations where personal or financial interests conflict with company interests.
- Not accept benefits from third parties: Never accept incentives, gifts, or payments connected with your role.
- Exercise reasonable care, skill, and diligence: Take an active role and make informed decisions.
Will there be administrative responsibilities?
Yes. Directors must ensure that statutory and administrative obligations are met, but these tasks are often delegated to a managing agent, such as our team at Pure Block Management, or a company secretary, but ultimately, they remain the directors’ responsibility.
Key requirements include:
- Filing annual accounts and confirmation statements with Companies House.
- Maintaining statutory registers (members, directors, transfers, charges, etc.)
- Issuing or cancelling share or membership certificates where applicable.
- Updating the Companies House register promptly when director changes occur.
- Holding regular board meetings and calling AGMs or EGMs as required.
Failure to comply may result in financial penalties, company strike-off, and potential personal liability or disqualification as a director.
What personal liabilities do I commit to as a director?
Directors can be held personally liable—civilly or criminally—for failings in their duties, including breaches of health and safety or building safety obligations.
To mitigate risk, Directors’ and Officers’ (D&O) Liability Insurance should always be in place.
Dedicated support and guidance
Pure Block Management is here to support directors in fulfilling their responsibilities effectively and compliantly.
We are committed to ensuring directors are confident in their role and supported in maintaining compliant, safe, and well-run developments
For queries or guidance, email hello@purebm.co.uk
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