Resident Management Companies
Leasehold Resident Management Companies are exactly what they say they are: companies consisting of leaseholders. Such companies are those established by collective enfranchisement (group action to purchase the freehold), share of the freehold for new-builds and Right to Manage companies (where leaseholders who meet the criteria can replace their managing agent with one of their own choosing). They are usually companies limited by shares (with shareholders) but RTM companies are limited by guarantee (with company members).
Management may also be delegated to the leaseholders from the freeholder through tri-party leases.
The main function of an RMC is to manage the common areas on behalf of the leaseholders and to ensure compliance with both the lease obligations and relevant statutory requirements. The RMC will also decide as to whether it is in the best interests to either self-manage or employ a managing agent.
Whether RMC’s own the freehold or not, they have one thing in common: their Directors take on the same amount of responsibility as their commercial counterparts under the Companies Act 2006. This is because the Health and Safety Executive see both types of company in the same light in that they both make money. There is however a significant difference: commercial Directors are paid and RMC Directors are not (at least not usually).