Leaseholder guide · Updated 28 August 2026
What is a Residents' Management Company (RMC)?
A Residents' Management Company (RMC) is a company set up so leaseholders can manage their building's communal areas, services and service charges. It is a party to the lease and the leaseholders are its members: where it is limited by guarantee they make up its membership, and where it has shares they hold a majority of those shares. It usually carries the repairing obligation. Some RMCs also own the freehold or hold a head lease, but an RMC does not have to: what gives residents control is the company itself, run by directors who are usually leaseholders.
RMC vs RTM company: what's the difference?
Both put residents in control, but they are created differently. An RMC is set up through the lease - often by the developer - whereas an RTM company is formed by leaseholders exercising a statutory right to take management away from the freeholder.
| RMC | RTM company | |
|---|---|---|
| How it is created | Set up by the developer, or named in the lease | Formed by leaseholders under the 2002 Act |
| Statutory right | No - it is contractual, through the lease | Yes - a statutory no-fault right |
| Relationship to the freehold | Party to the lease, not necessarily the freeholder; some also hold a head lease | None - the freeholder keeps it |
| Who can be a member | Shareholders or members defined by the lease | Qualifying long leaseholders, and landlords from the acquisition date - membership is by application |
| Proof of fault | Not applicable | Not needed |
Who owns and runs an RMC?
Members own the company - commonly one share or one membership per flat, passed on when a flat is sold, so control stays with the current residents. A buyer becomes a member on agreeing to become one and being entered in the register of members. Directors are appointed under the articles, and are usually volunteer leaseholders: the model articles allow appointment either by ordinary resolution of the members or by a decision of the existing directors. They make decisions and carry legal responsibility for the company. Members can remove a director by ordinary resolution at a meeting, on special notice of at least 28 days to the company. Directors can appoint a managing agent to handle day-to-day work while remaining accountable to the members.
What are an RMC director's responsibilities?
Being an RMC director means wearing two hats: company-law duties and property-management duties.
Run the company correctly
Directors owe the legal duties set out in the Companies Act 2006, and must file annual accounts and a confirmation statement at Companies House - even for a small, non-trading block.
Manage service charges lawfully
Set a realistic budget, demand service charges in line with the lease, hold the money in trust, and comply with the Landlord and Tenant Act 1985. Charges must be reasonable and properly accounted for.
Consult on major works
In England, where qualifying works will cost any leaseholder more than £250, or a qualifying long-term agreement will cost any leaseholder more than £100 in an accounting period, the RMC must run a Section 20 consultation. Without one, what it can recover from each leaseholder is capped at that figure, unless the tribunal dispenses with the requirements.
Maintain the building and insurance
Keep the structure, common parts and grounds repaired, arrange buildings insurance, and meet building-safety obligations - appointing a managing agent or contractors where needed.
Keep members informed
Hold the meetings the articles require, share accounts, and answer reasonable leaseholder requests. Members can remove a director by ordinary resolution at a meeting, on special notice of at least 28 days to the company, so transparency keeps the company healthy.
For a deeper look, read our guide to RMC director responsibilities.
Residents' Management Companies: frequently asked questions
Run your RMC without the spreadsheets
Marklet gives RMC directors a shared workspace for issues, service charge oversight, Section 20 consultations, and a full audit trail. Free to start.
Further reading
- Residents' Management Companies explained
- RMC director responsibilities
- What is Right to Manage (RTM)?
This guide is general information, not legal advice. For free, official guidance see LEASE (the Leasehold Advisory Service). Always take specialist advice on your specific lease and company.