An RTM management company provides professional property and block management support to a Right to Manage company after leaseholders take control of the management functions of their residential building.

Right to Manage, commonly abbreviated to RTM, allows qualifying leaseholders to take over specified management responsibilities without buying the freehold and without having to prove that the existing management has been poor. Once the RTM has been successfully acquired, the RTM company can manage the building directly or appoint a professional managing agent to undertake day-to-day management.

For leaseholders, directors and residential developments considering professional RTM property management, Fraser Bond provides block management-related property advice and wider real estate services through FraserBond.com.

What Is an RTM Company?

A Right to Manage company is the legal entity through which qualifying leaseholders exercise the statutory Right to Manage.

The framework originates from the Commonhold and Leasehold Reform Act 2002. An RTM company is a private company limited by guarantee established to acquire and exercise management rights over qualifying premises.

Once the right has been acquired, specified management functions that previously belonged to the landlord under the leases transfer to the RTM company.

These functions can include services, repairs, maintenance, improvements, insurance and general management.

This gives leaseholders considerably greater control over how their residential building is operated.

What Is an RTM Management Company?

The terminology can sometimes cause confusion.

The RTM company is the legal company through which leaseholders exercise the Right to Manage.

The managing agent is the professional property-management business that the RTM company may appoint to undertake everyday management.

Government guidance confirms that an RTM company can manage the building itself or employ a managing agent to carry out management functions.

Therefore, when property owners search for an "RTM management company", they are often looking for a professional block managing agent experienced in working with RTM company directors.

What Does an RTM Management Company Do?

After appointment, an RTM managing agent can undertake many of the practical responsibilities involved in operating a residential building.

Depending on the leases and management agreement, this may include:

• Preparing and administering service-charge budgets
• Collecting and monitoring service charges
• Coordinating communal repairs and maintenance
• Arranging cleaning and grounds maintenance
• Managing contractors
• Conducting building inspections
• Coordinating building insurance matters where applicable
• Maintaining appropriate property records
• Planning reserve or sinking funds
• Coordinating major works
• Supporting applicable consultation procedures
• Communicating with leaseholders and residents
• Managing communal facilities
• Coordinating emergency repairs
• Providing financial and management reports to RTM directors
• Assisting with lease administration and relevant approvals

The exact responsibilities should be clearly defined within the management agreement.

RTM Company vs Managing Agent

It is important for leaseholders to understand the distinction between the two organisations.

The RTM company holds the management rights.

The managing agent performs agreed management functions on behalf of the RTM company.

Appointing an agent therefore does not mean the RTM company disappears.

Directors remain responsible for overseeing the company and making appropriate decisions while the managing agent provides professional operational support.

This structure allows leaseholders to retain control without requiring volunteer directors to personally organise every repair, invoice and contractor.

Why RTM Companies Appoint Professional Managing Agents

Taking control of a residential building can provide leaseholders with greater influence over management, but it also creates substantial responsibilities.

Someone needs to prepare budgets, collect service charges, coordinate repairs, communicate with residents and manage contractors.

Large developments can involve hundreds of individual transactions and maintenance decisions each year.

Volunteer directors may not have sufficient time or specialist property-management experience to undertake this work themselves.

A professional RTM managing agent can provide the infrastructure required to operate the development while directors concentrate on governance and significant decisions.

RTM Service Charge Management

Service-charge administration is usually one of the most important elements of RTM management.

The RTM company may become responsible for collecting and managing service charges associated with relevant management functions after acquisition. Government guidance specifically identifies service-charge collection and management among the responsibilities that transfer to an RTM company.

A managing agent can prepare annual budgets based on anticipated expenditure and monitor actual spending throughout the financial year.

Typical expenditure could include cleaning, communal electricity, maintenance, landscaping, insurance, lift servicing and professional management.

The applicable leases remain fundamental when determining which costs can be recovered and how they are allocated.

Financial Reporting for RTM Directors

RTM directors need sufficient financial information to understand how their building is performing.

The managing agent should therefore provide appropriate financial reports.

Directors may need visibility over service-charge income, expenditure, unpaid contributions, contractor payments and reserve funds.

For larger developments, financial reporting can become particularly important because substantial amounts of leaseholders' money may be administered.

Good financial management should allow directors to identify unexpected expenditure before it develops into a serious budget problem.

Reserve and Sinking Fund Management

Residential buildings periodically require substantial expenditure.

Roofs, lifts, external decorations, communal heating systems and other major components eventually require significant repair or replacement.

Where permitted by the relevant leases, reserve or sinking funds can help accumulate money towards anticipated expenditure.

A professional RTM management company can assist directors with longer-term maintenance planning so financial decisions are not based solely on immediate problems.

However, specialist surveyors may be required to assess the condition and expected lifespan of significant building components.

Building Maintenance

Maintenance is one of the most visible aspects of block management.

Residents expect communal areas to remain safe, functional and appropriately maintained.

A professional managing agent can coordinate routine and reactive maintenance across the development.

Regular building inspections can help identify deterioration before it develops into a more substantial problem.

For example, early evidence of water ingress may justify further investigation before extensive internal damage occurs.

Maintenance records can also help directors understand recurring problems and determine whether continued repairs or replacement provide better long-term value.

Planned Preventative Maintenance

An effective RTM management strategy should look beyond immediate repairs.

Planned preventative maintenance considers what the building is likely to require over several years.

This could include external decoration, roofing, communal lighting, drainage, lift servicing and mechanical equipment.

A structured maintenance programme allows directors to prioritise expenditure and anticipate future financial requirements.

For larger buildings, a planned maintenance programme can be particularly valuable when combined with professional condition surveys.

Emergency Block Management

Residential buildings can experience emergencies outside normal working hours.

Serious water leaks, security failures or loss of essential communal services may require immediate attention.

RTM directors should therefore establish how their managing agent handles emergencies.

The management agreement should explain how urgent contractors can be instructed and what expenditure can be authorised without prior director approval.

Clear procedures reduce the likelihood of directors having to make operational decisions in the middle of an emergency.

Contractor Management

Professional block management requires access to reliable contractors.

Depending on the building, these might include cleaners, electricians, plumbers, lift engineers, gardeners and specialist maintenance providers.

The cheapest contractor is not necessarily the best choice.

Relevant competence, experience and insurance should be considered according to the nature of the work.

RTM directors should also understand how their managing agent selects contractors and whether any additional fees apply to maintenance or project management.

Major Works Management

Major works can represent some of the largest financial commitments undertaken by an RTM company.

Examples can include roof replacement, external refurbishment, lift modernisation and substantial repairs to communal areas.

These projects may require surveyors, engineers or other professional consultants.

Consultation requirements may also apply depending on the circumstances.

An experienced managing agent can coordinate the administrative elements of a major project while appropriately qualified specialists deal with technical matters.

RTM Companies and Lease Responsibilities

Acquiring the Right to Manage does not mean the leases cease to matter.

The leases remain central to the management of the building.

The RTM company assumes relevant management functions relating to matters including services, repairs, maintenance, improvements and insurance.

The RTM company may also have responsibilities concerning lease approvals and enforcement.

For certain approvals, government guidance requires the RTM company to notify the landlord before granting permission, with the applicable notice period depending on the type of approval.

Professional management therefore requires an understanding of the leases as well as practical property-management experience.

RTM Management and Leaseholder Communication

RTM is fundamentally based on leaseholders taking greater control of their building.

Communication should therefore remain an important part of the management structure.

Residents should know how to report maintenance problems and whom to contact.

Directors should also receive sufficient information from their managing agent to understand significant building issues.

Major works and substantial expenditure should be communicated appropriately rather than appearing unexpectedly.

Good communication can help directors maintain confidence among the wider leaseholder community.

RTM Management for Small Blocks

Small residential blocks can benefit from professional RTM management as much as large developments.

A converted building containing only a handful of apartments may still require service-charge administration, insurance, repairs and long-term maintenance.

However, management should remain proportionate.

A six-flat conversion should not necessarily require the same management infrastructure as a 200-apartment development.

RTM directors should therefore look for a management arrangement appropriate to the scale and complexity of their building.

RTM Management for Large Developments

Large developments require significantly more sophisticated management systems.

Hundreds of residents may rely on communal lifts, heating systems, access controls, parking facilities and other infrastructure.