The short version
- An RMC (residents' management company) is a company, usually owned by the leaseholders, that has management responsibilities under the leases, or owns the freehold, or both. It is often set up when the building is developed.
- An RTM (Right to Manage) company is a company formed by qualifying leaseholders to take over management from the landlord using a statutory right, without buying the freehold.
Side by side
| RMC | RTM company | |
|---|---|---|
| How it comes about | Usually set up with the building and named in the leases, or formed to buy the freehold | Formed by qualifying leaseholders under the Commonhold and Leasehold Reform Act 2002 |
| Owns the freehold? | Sometimes (for example, share of freehold) | No, the landlord keeps the freehold |
| Where its powers come from | The leases and its own articles | Statute: it takes over the landlord's management functions |
| Members | Usually the leaseholders | Qualifying tenants, and the landlord is entitled to join |
| Need to prove poor management? | Not applicable | No, it's a "no fault" right |
| Can appoint a managing agent? | Yes | Yes |
Residents' management companies in more detail
An RMC is a company that has responsibility for managing the building. Its role is set out in the leases. In some buildings it's a party to each lease with obligations to repair, insure and provide services. In others, it also owns the freehold (often called share of freehold).
The leaseholders are usually the members, and they elect directors from among themselves. The directors are responsible for running the company and the building, often with the help of a managing agent. See RMC management.
RTM companies in more detail
Right to Manage was created by the Commonhold and Leasehold Reform Act 2002. If a building qualifies, the qualifying leaseholders can form an RTM company and serve a claim notice on the landlord. If the claim succeeds, the RTM company takes over the management functions under the leases on the acquisition date.
The landlord still owns the freehold and is entitled to be a member of the RTM company. The RTM company has to keep the landlord informed about some matters, such as approvals under the leases. The rules on eligibility and costs have been changing under the Leasehold and Freehold Reform Act 2024, so check the current position for your building. See Right to Manage.
Which applies to you?
If your building already has an RMC named in the leases, the leaseholders may already have a route to influence management through the company. If the landlord controls management and leaseholders want to take it over, RTM may be the answer.
Either way, the company will need someone to do the day-to-day work. That's where a managing agent comes in. We manage buildings for both RMCs and RTM companies, with directors able to see finances, approvals and repairs in the Harrison Services Portal.
This guide is general information about residential block management in England, not legal advice. Your lease and your building's circumstances matter, so take advice on your specific situation.