What does your right to manage company need to do?

The right to manage company ( or RTM Company) will have the following obligations and duties:

  • Like any other landlord the company should comply with the government approved Code of Management Practice.
  • The company must honour any obligations the landlord has in the tenant’s leases, i.e. to fix repairs within a certain time to a reasonable standard.
  • The company has an obligation to keep the landlord informed when a tenant breaches the terms of their lease.
  • As the right to manage company will function like an ordinary company, the directors will have all the responsibilities a normal director would have as well as maintaining the landlord’s covenants
  • Right to manage companies will need to be registered at Companies House, maintain  comprehensive accounts and submit yearly returns. It will also need to have Articles of Association drawn up – something your solicitor can help you with
  • You will need a Board of Directors for the company (usually made up of qualifying tenants), who will oversee the company’s day-to-day management. It is therefore particularly important, when considering exercising the right to manage, to identify tenants who are willing to take on this level of responsibility and commitment
  • The company must remain solvent, which may involve directors or members funding the shortfall when other tenants do not pay their monthly contribution on time. It will also need a tight fundraising strategy – to make sure that sufficient monies are raised to keep up with a satisfactory level of block maintenance
  • It will need to hold regular board meetings

Most importantly, any UK RTMcompany will be responsible for the day-to-day running of the building, including arranging insurance, maintenance and repairs. Any planned developments must be voted on by the company’s members, which may include the landlord.

For simple, swift advice on the right to manage of leasehold property – contact our team

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