When it comes to managing residential developments, the Resident Management Company (RMC) plays a vital role in ensuring the smooth running of shared spaces, communal facilities, and long-term property value. For leaseholders and freeholders alike, knowing how an RMC operates and how it compares with RTM Property Management can make a significant difference in how effectively their building is maintained.
What is a Resident Management Company?
A Resident Management Company is a legal entity, usually set up by leaseholders, that takes responsibility for managing the communal aspects of a residential block or estate. Instead of leaving all responsibilities to a landlord or external managing agent, the residents themselves become company members and directors. This structure allows them to make key decisions about maintenance, repairs, insurance, and overall service standards.
The primary benefit of forming a Residents Management Company is control. Leaseholders have a direct say in how service charges are spent, which contractors are hired, and the priorities for the property’s upkeep. This often results in better-maintained communal areas, quicker decision-making, and greater transparency.
RTM Property Management vs. Resident Management Company
While an RMC is often built into the structure of a lease from the outset, RTM Property Management (Right to Manage) provides an alternative route for leaseholders who want more control. Under the Commonhold and Leasehold Reform Act 2002, leaseholders can exercise their “Right to Manage” by forming an RTM company. This allows them to take over the management functions of their building without having to prove mismanagement by the landlord.
The main differences between the two are:
- Resident Management Company: Usually written into the lease when the development is first created. It gives residents ongoing responsibilities from the start.
- RTM Property Management: A legal right that leaseholders can exercise later, even if the landlord objects, provided eligibility criteria are met.
In practice, both structures give residents control over the day-to-day management of their property. The choice between them often depends on how the property was originally set up.
Why Residents Management Companies Matter
For leaseholders, being part of a Residents Management Company can bring both benefits and responsibilities. On the positive side, residents have more influence over costs, service levels, and long-term planning. For example, they can choose to set aside funds for future works like roof replacements or lift maintenance, ensuring that property values remain strong.
On the other hand, being a director of an RMC comes with legal duties. Decisions must be made in the best interests of all members, financial records must be kept accurately, and compliance with health and safety regulations is essential. Many RMCs choose to appoint a professional managing agent to handle day-to-day operations, while the residents retain ultimate control.
Conclusion
Whether through a Resident Management Company established from the outset or via RTM Property Management, residents who take control of their building’s management often benefit from greater transparency, improved maintenance, and more value for money. For anyone living in a block of flats or on a residential estate, understanding the role of a Residents Management Company is key to ensuring their investment and community thrive for the long term.