RMC Directors Training and Resources

What is an RMC Director?

More frequently we are beginning to see blocks of flats to be owned or managed by a company made up of the leaseholders. These are usually known as Residents’ Management Companies (RMCs) or Right to Manage Companies (RTMs).

The duties that RMCs have towards leaseholders will be set out in the leases. Contractual duties (such as repairs, maintenance, insurance, and service charge accounting) are combined with statutory duties (including restricting service charges to reasonable amounts and consulting on major work) and are owed to all leaseholders. The full responsibilities of any RMC will be set out in the RMC’s Memorandum and Articles of Association as well as being contained in the leases themselves.

Typically however, each flat owner will be a member or shareholder in the RMC and members will be appointed from amongst their number to become Directors. RMC’s are in turn run by these Directors.

What must an RMC Director do?

 

  • Follow the Residents’ Management Company’s rules as laid down in its Memorandum and Articles of Association.
  • Only make decisions for the benefit of the RMC and its leaseholder members – never for an individual.
  • Maintain statutory company records, report any changes and ensure all mandatory returns are filed with Companies House and HMRC.
  • Ensure the RMC service charge accounts present an honest and fair picture of the RMC’s finances.
  • Ensure compliance with all relevant health and safety and fire risk legislation.
  • Arrange the necessary insurance cover to help them fulfil their responsibilities as a director, to ensure both they and the development are adequately protected.
  • Ensure that the obligations of the lease are carried out by the managing agent.
  • Inform the other directors and shareholders of any potential conflict of interest or if any director might profit personally from a transaction the RMC makes.

Specific annual duties include: 

  • Preparing the RMC statutory accounts, signing and submitting to Companies House as well as the Confirmation Statement and all changes (i.e. appointments, resignations, change of registered office, etc.)
  • Arranging the signing of all other statutory documents.
  • Approving the annual service charge budget.
  • Operating on a board with other RMC directors and attending meetings with your appointed managing agent.
  • Working with the managing agent on expenditure and major works.
  • Providing clear instructions to the managing agent (if applicable) for all other items that may affect the smooth running of your development.

Health and Safety - What you need to know as an RMC Director

Every director on the board of an RMC has a duty to comply with a range of health and safety regulations that protect all leaseholders and third parties with authorised access. The corporate penalties for breaches can be very severe, up to and including corporate manslaughter in the worst scenario.

The following summarises the main health and safety regulations that apply to blocks of flats. There are many others, so it’s essential that the RMC directors and those advising them are familiar and up to date with Landlord & Tenant legislation, Management of Health and Safety at Work Regulations 1999 as well as the Companies Act 2006.

  • The duty to comply with the regulations falls on the landlord or person responsible for management which could be an agent, a resident management company or a right to manage company.
  • Health & safety should never be ignored or dismissed because it requires additional expenditure as the cost of failing to comply if there is an accident or injury may be far greater than the cost to comply.

Whether for an apartment block or a managed estate, it’s a legal requirement that the RMC carries out, documents, and acts upon an annual risk assessment of all communal and external areas (including the roof). You may argue common areas are not “at work” but if any cleaner, gardener, managing agent or repair contractors enters them, then a risk assessment must be made. This ensures a safe working environment for leaseholders, visitors, and all contractors. If there are no employees of the landlord working at the block there is no requirement to record the risk assessment, but it would be “best practise” to do so anyway as if there were to be an accident and you had no proof of a risk assessment being carried out, you are much more likely to be prosecuted and/or sued for negligence.

The bottom line is that if there’s an incident and no risk assessment – or there’s an assessment whose recommendations have been ignored – the RMC may be prosecuted by the Health & Safety Executive. The risk assessment should be looked at annually to reassess the situation.

Running an annual fire safety risk assessment is a legal requirement – as is documenting it and acting on any recommendations. Fire Officers will be able to enter any block of flats to inspect, ask to see the risk assessment and issue enforcement notices to improve fire safety should the need arise., even if there’s been no fire incident.

Legislation requires the RMC to take all necessary safety precautions with all electrical systems and conductors. If electrical equipment is supplied by the landlord or agent to say a cleaner, then it must be regularly tested and properly maintained. Annual testing and the fixed wiring in the communal areas must be tested by a qualified engineer every five years. Breaches may mean prosecution. A visual inspection and a more formal test should be carried out at the intervals.

The RMC has a legal obligation to put in place all necessary checks and controls that protect heating, water, ventilation, and air conditioning systems from potentially fatal Legionella bacterial infection – as well as for storage and use of all hazardous substance and the discovery and disposal of asbestos.

Legionella is a bacterium common in water systems which can result in legionnaires’ disease. The landlord or agent of a block of flats has a duty to control the risks of legionella in any pipes, tanks and taps in common parts (including a cleaner’s cupboard).

Cold water tank or taps and showers within lessees’ flats are the responsibility of the lessees, unless the lease puts repairing responsibility for them on the landlord. The starting point is a risk assessment usually carried out by an expert, and if there are risks then a written action plan should be produced to reduce the risks. An annual review of the risk assessment should be made. Again, breaches may end in prosecution.

Work at heights can be at any height if a person could be injured falling from it, even if below ground level. If window cleaners or other contractors visit a block of flats, then an assessment of the risk from working at height is required. Part of the duty to assess risk will obviously fall on the window cleaner, but the landlord or his agent once again also has a duty.

The principle is that any work at height should be avoided if it is practical to do it in another way. It if cannot be avoided, then the work must be assessed and planned to be done with the least risk. Work at height can include changing light bulbs, general cleaning, testing smoke detectors and cleaning gutters. If a ladder is supplied by the landlord for changing light bulbs or checking smoke detectors, it should be checked regularly, and a notice stuck on it with safety precautions for its use.

Any contractor or self-employed person instructed by the managing agent, on behalf of the RMC, is responsible for ensuring they do not carry out any work that is likely to harm members of the public.

When instructing contractors, the managing agent is responsible for ensuring that those contractors have appropriate qualifications to carry out the work allocated to them and in a way that will not endanger others. This includes robust Working at Height processes. A breach may result in a civil claim and/or investigation and potential prosecution by the Health & Safety Executive.

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