Resident Management Companies

Residents management companies – who does what?

It is common for the freehold of leasehold property to be owned by a Company. You may have heard the term residents’ management company or flat management company or even property management company or freehold management company.

The roles within the company are as follows:- Director and Member

Being a Director – what does it involve?

If you are a Director, you will be noted online on Companies House, under the information listed within the company name.

It is common for yourself and the other Directors to be collectively responsible for the day-to-day management of the company. The powers and responsibilities you have as Director will be set out in the company’s articles of association and these will also be filed online at Companies House.

As Directors, you can appoint a professional managing agent to carry out the day-to-day functions such as carrying out repair or maintenance to ensure that necessary obligations are followed.

Generally speaking, some of the responsibilities Directors get involved with are as follows:

· Maintaining the structure, walls and roof

· Maintaining communal hallways, pathways and car parks

· Cleaning, gardening and window cleaning

· Onsite facilities: gates, lifts, smoke/fire alarms

· Risk assessments: Fire and Health and Safety

All Directors owe duties to their Company to conduct themselves in a certain way. In particular, it is important to bear in mind your duty to act in a way which ‘promotes the success of the company for the benefit of its members as a whole’.

As a Director you can improve things for your block. If there are certain issues such as the maintenance then you would be able to address this with the other Directors and ensure that it is dealt with in the best way possible.

It is also necessary to have Directors to run the freehold company efficiently and ensure that the building works properly.

Being a Member – what does it involve?

Companies House will list company members online under the filing history of the company details. Unlike a director, a member of a residents’ management company is not generally involved in any day-to-day management. Although members usually have the power to appoint or remove directors, it’s those directors who will make all the key decisions.

If you are uncertain whether you would like to be a Director, you could start off with being a member only however if you wish to be involved in the management of your building, the best position for you is to be both a member and director of the management company. As a member you will have limited rights.

Other – Leaseholder

This describes you in your personal capacity as the owner of your leasehold property. You may be Director, Member and a Leaseholder. As leaseholder you will own a lease which is the legal agreement between yourself as leaseholder and the freeholder. Your lease will contain conditions such as permissions to make alterations, maintenance of the property, responsibilities and repairs.