Whitevale guidance
RTM and RMC directors: what stays your responsibility when you appoint an agent?
Appointing a managing agent delegates work; it does not remove the directors’ responsibilities for running their company. A useful arrangement makes clear what the agent can do, which decisions the board retains, how information is reported and when specialist advice is needed. Directors do not have to do every operational task themselves, but they should understand what they are approving.
This guide concerns RTM and residents’ management companies responsible for residential blocks in England. Their constitutions and responsibilities differ, so it is not a substitute for checking your company’s documents and leases.
Becoming a resident director often starts with a practical wish: better repairs, clearer accounts or a building that feels properly looked after. It can then become difficult to tell which questions belong with the managing agent and which still need a board decision.
The answer is not to supervise every contractor personally or to accept every recommendation without scrutiny. The useful middle ground is a clear appointment, a working understanding of the building and a board that records informed decisions.
First, understand which company you are directing
An RTM company acquires specified statutory management functions. An RMC may have responsibilities under the leases and other arrangements. A company owning a freehold may hold additional property interests. These descriptions should not be treated as interchangeable.
Locate the articles of association, relevant leases, company register information and any management agreement. If management arose through an RTM acquisition or an appointment order, keep the relevant documents available too.
The RTM framework has prescribed company articles and defined management functions. Your company’s actual powers and procedures matter when approving work, appointing officers or organising meetings. Read about running an RTM company.
A member, a director and a leaseholder have different roles, even when one person is all three. Paying a service charge does not automatically make every management instruction a board decision. Conversely, being a director does not allow someone to set aside the lease or ignore the company’s rules.
What can the managing agent do for the board?
The agreement may cover budgeting, collection, record keeping, repairs, inspections, contractor administration, communication and support with insurance or meetings. The scope needs to say what is actually included and who is responsible for each part.
An agent can prepare a recommendation, investigate a problem or carry out an authorised instruction. The board should know when it must approve a decision and what authority has already been delegated. Professional input is useful precisely because volunteer directors cannot be experts in everything.
Ask for the operational arrangement to be written down: the board’s contact, reporting frequency, spending limits, emergency authority and escalation route. A verbal understanding can quickly become unclear when a director resigns or a different property manager takes over. Read about management agreements and responsibilities.
| Matter | What to make clear |
|---|---|
| Annual budget | Who prepares it, who checks the assumptions, who approves it and who issues the demands. |
| Repair instruction | What the agent can authorise, when the board must decide and how completion is checked. |
| Safety action | Who holds the duty, what competent advice is required and who tracks action through to completion. |
| Company filing | Who prepares and submits it, which approval is needed and how the board knows it was accepted. |
| Resident complaint | Who responds, when it escalates and how personal interests are kept separate from the decision. |
Which responsibilities stay with the directors?
Company directors have duties including acting within the company’s powers, exercising independent judgement and reasonable care, and dealing appropriately with conflicts of interest. Hiring an agent or accountant does not remove those duties.
They apply to a volunteer role too. You can rely on appropriate professional advice, but you should understand the issue sufficiently to make the decision expected of you and ask for clarification when you do not. Read the government’s directors’ duties guidance.
For a management company, this means keeping the company’s purpose and obligations in view, not treating decisions as a way to benefit your own flat at the expense of others. A resident’s preference, a member’s request and a legal obligation may point in different directions.
Where the company cannot meet obligations or there are serious financial difficulties, seek professional advice promptly. Do not assume ordinary spending practices can continue unchanged or that service-charge trust funds are freely available to solve every company liability.
What financial information should the board understand?
Start with a clear picture of the current budget, expenditure against it, cash held, unpaid invoices, arrears and reserve commitments and future funding. No single report answers all of those questions.
A bank balance is not a forecast of whether future obligations can be paid. A budget is not proof that money has been collected. Accounts for a past period do not tell you everything about contracts already committed for the next one.
Ask the agent to explain the larger variances and the next decision they require from you. If a line has been labelled “overspend”, establish whether it reflects necessary unexpected work, an inaccurate estimate, different timing or an error.
Service-charge money held on trust needs to be distinguished from the company’s own funds. The RTM company may need separate provision for company expenditure, subject to the lease and the correct funding route. Read about RTM finances and accounts.
Are the company’s annual accounts the same as the service-charge accounts?
Not necessarily. The company has its own accounting and filing obligations, while money collected under the leases may be held on trust and reported separately. The two sets of responsibilities need coordinating rather than assuming one document satisfies everything.
Ask the accountant to explain which accounts are required, who approves them and the tax position. A company described as dormant does not automatically mean every filing or trust-related obligation disappears. Read HMRC’s flat management company guidance.
What should the board ask before approving work?
A useful decision paper identifies the problem, the supporting report, the proposed scope, alternatives, price, funding and next steps. The detail should be proportionate to the job. A major project needs more than a forwarded quotation and a request to reply “approved”.
Ask what is included, what is excluded, who can approve variations and what evidence will confirm completion. Where technical judgement is needed, identify the adviser rather than expecting the board or property manager to guess.
Consultation requirements can still apply when leaseholders control the management. The board should know who is checking the process before instructions are issued. Our Section 20 major-works guide explains the distinction between consultation, funding and approval.
For fire and building safety, identify the relevant dutyholders and how responsibilities are coordinated. Appointing an agent does not justify an unexamined assumption that all duties have transferred. The right arrangements depend on the building and the parties’ responsibilities. Read LEASE’s fire-safety guidance for resident directors.
A board meeting should not become a substitute for a competent risk assessment. Where safety is involved, ask what the finding means, how risk is being managed and what action is required. Refer the technical question to the right adviser.
How should decisions and conflicts be recorded?
Follow the articles on notice, quorum, voting and any member approval required. Avoid assuming that a convenient exchange in a residents’ messaging group is a valid decision for every purpose.
Keep a concise record of the issue, the information considered, the decision and who is responsible for implementing it. Record conditions too: approval subject to a clarified scope is different from authority to proceed with any variation. Read about RTM meetings and decisions.
If a director, relative or connected business may benefit from a transaction, identify the interest and check the proper procedure before deciding. Disclosure is not an automatic cure for every conflict. The company’s rules and legal duties may affect participation or approval.
Distinguish legitimate disagreement from a missing decision. Directors can ask questions and reach different views, but the company needs a recorded outcome and a clear instruction where action is required.
Should every leaseholder vote on every contractor?
Not automatically. The articles, leases, statutory consultation requirements and the nature of the decision determine the process. Some matters may be for the board, while others need member involvement or consultation.
Explain which process applies rather than calling every resident preference a binding vote. Clear communication helps people understand both their rights and the board’s responsibilities.
Who checks company filings and identity verification?
Maintain a calendar for accounts, the confirmation statement and changes that must be reported. Assign a person to prepare each item and establish how the board will confirm submission and acceptance. Delegating filing is different from forgetting about it. Read the government’s flat management company guidance.
Companies House identity-verification requirements began on 18 November 2025, with transitional arrangements for existing directors and people with significant control. Do not assume that all directors have the same deadline or that verification for one role automatically completes every required submission. Check the current instructions and the due dates for your own roles. Read the current role-by-role guidance.
Keep personal verification codes secure and follow the official process for providing them where required. The board does not need to circulate everyone’s identity documents in a residents’ email thread to keep a sensible compliance record.
Tax and accounting status also need appropriate advice. HMRC may treat some flat management companies as dormant, but that is not a conclusion to draw merely because the company does not aim to make a profit.
How can the board work with the agent effectively?
Agree one route for routine instructions, while allowing proper board oversight and escalation. Conflicting messages from several directors can leave an agent unsure whether a decision has actually been made.
Request reports that support decisions, not simply more pages. A short schedule showing the issue, current position, next action, owner and target can be more useful than a long list in which every item is marked “ongoing”.
Check the service against the appointment and explain concerns with examples. If you are considering a replacement, our guide to changing a managing agent explains how to review the agreement and plan a handover.
Directors also need continuity. Make sure the company can access its records, understand current instructions and identify important deadlines when someone steps down. The company should not depend on one volunteer’s personal inbox.
Does directors’ and officers’ insurance remove personal risk?
No policy should be treated as permission to ignore duties. Ask what cover is available, the insured parties, exclusions, limits and notification requirements. The right arrangement depends on the company and its activities.
If you face a specific claim or concern, obtain advice on the facts and notify the appropriate insurer as required. Do not assume either that every director is personally liable for every problem or that company status prevents all personal exposure.
An agenda for your next board review
Check that delegation and oversight fit together
Use these prompts for your next discussion. Your selections are not saved or sent to Whitevale and do not confirm legal compliance.
You do not need to become an expert in every subject to be an effective board. You do need a system that brings the right information and advice to the right decision, then checks that the decision is carried out.
When you want to talk it through
Would your board benefit from clearer management support?
Tell us whether you are an RTM or RMC director, how your agent currently reports and which decisions are proving difficult. We can discuss support with management arrangements, reporting and practical oversight.
Discuss support for your boardSources and scope
Researched on 17 October 2026 for companies managing residential blocks in England. The linked government, Companies House, HMRC and LEASE materials support the legal context. The agenda and reporting suggestions are practical aids, not legal, accounting or insurance advice for a specific company. Check the company’s documents and current filing requirements before acting.