Replacing RMC with RTM

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    Replacing RMC with RTM

    In seven days time we have a residents meeting to decide on the future of our apartment blocks; one with nine apartments, one with four apartments, thirteen total. They are about three meters apart physically. Our freeholder liquidated in 2012 and the lender took over as default who then set up an RMC for us in 2013. In 2017 a resident/director switched us to another managing agent (now the secretary) without any other residents knowing and they immediately increased service fees by 23%. Two years on and we are due to sign a new contract with the agent end of Feb much to the disapproval of 80% of residents. What are our best options.

    I've personally researched RTM vs. RMC and in doing so have read conflicting info. Also, this morning I spoke with an alternative 3rd party managing agent and they said we could fire the existing agent and chose to go alone with residents running the RMC if we wanted, just like RTM. However, I've also read this is not possible and also any secretary or director of an RMC must have an address off-site.

    As an RMC can we fire the agent and run the site ourselves or do we need RTM to do this and if we do keep the RMC and fire the agent, who is the new secretary/directors and can they live on site?

    Could anyone please shed some light on the above.


    Converting an RMC to and RTM makes no sense to me. You can achieve most of the side effects by changes to your articles of association. If the RMC owns the freehold, you can't do it.

    RMCs actually cover a broad range of arrangements, but I've never heard of one where the constitution would prevent it ending a managing agent contract, or for that matter, a lease that required a particular managing agent. I've also never heard of one that would require an external secretary.

    Why not actually read the constitution.

    You can always change it by a special resolution (75% majority), although be a bit careful as some element of the constitution may be there to get a specific tax or landlord and tenant status. Neither restrictions on the company secretary, or anything about managing agents would be in that category, though.


      We're considering replacing not converting, starting afresh. The RMC uses model articles as that's how it was set up when the builder/freeholder liquidated.

      Keeping it simple can anyone answer these specific q's please.

      As an RMC can we fire the agent and run the site ourselves or do we legally need RTM to run the site ourselves? But if we opt to keep the RMC and fire the agent, who becomes the new secretary/directors and can they live on site legally?


        Is the meeting for the residents or the members?

        The directors are running the RMC on behalf of the members and they have the right to appoint or reappoint a managing agent and to decide to manage it yourselves. The members should make their views clear to the directors.

        If the contract with the managing agent is not renewed, it will probably resign as Company Secretary. The directors would decide then whether or not to replace the Company Secretary.

        I see no reason why a director or a company secretary need have an address off-site.


          Yes you can fire the agent, subject to any terms in the contract. Generally agent contracts are never for more than one year, to avoid becoming qualifying long term agents.

          The same people how are already the directors remain the directors, unless the members change them, or they resign.

          The same person who is the secretary remains the secretary, although they will probably resign if they are the agent. The directors, or the members in general meeting, can remove the secretary, and appoint a new one.

          No offence is committed by not having a secretary, although if the articles are old enough to require one, the company could sue its directors for any loss incurred (can't think how there could be a loss) or could seek an injunction requiring one to be appointed.

          If all the directors are the supplied by the managing agent, your first step should be to call a general meeting to remove them as directors and appoint your own, as discussed on several recent threads. If you are unable to do that you will be unable to run an RTM.

          It is best that the directors live on site. The company secretary could be your accountant, but it could also be a director, or you could have special resolution to remove the need for one, entirely. As you will have no managing agent to advise you on the law, it is essential that your directors have knowledge of the law, lease, etc.


            Thanks. Here's the thing I'm trying to establish and the firing is not the issue as such. From what I read online and I haven't been able to establish otherwise. Company Law states that an RMC must hire and have a managing agent running the company. Only RTM can run without a managing agent. If the opposite is true, do you have any references to suggest this.



              Please cite your source. An RMC is just a property management company run by the "residents" of that property. Residents really means leaseholders, as, with BtL many are not actually residents. It will report to Companies House as having an SIC of 98000 and its constitution will include management of the property. Beyond that, it is just a company, and there is no special legislation about its powers.

              Unlike RTMs, which have tightly constrained constitutions, the company articles can vary greatly.

              It i possible that some tax legislation specifically refers to them, but landlord and tenant law does not. RTM's owe their existence to specific provisions of landlord and tenant law.

              Any requirement for a managing agent would be in the lease, not tied to the company, although I would suggest that most leases allow an agent to be paid, but don't require it. Unless your lease is extremely recent, agents will not have been special. Anyone could be an agent, even one of the leaseholders, so insisting on a managing agent would not have made sense unless there were additional constraints.

              The main purpose of RTMs is to take power away from a freeholder who does not, themselves pay service charges. The one thing that an RTM gives that an RMC doesn't have is the ability to handle requests for licences. Even then, many RMCs are also the freeholder, in which case they already even have that power, so an RMC can have all the powers of an RTM.,

              Remember that a managing agent is an agent. They cannot do anything without their principal, which it the RMC.

              I'm actually seriously concerned that, if you have such a hazy understanding of the type of company you have, you really will not be able to self manage without tying yourself in legal knots.


                There is no obligation for an RMC to appoint a managing agent. If you let us know what you have read or which parts of Company Law you are referring to, we shall be able to assist you further.


                  Thank you all for your clarification and advice. Much appreciated. I have a few more concerns ahead of a General Meeting this weekend.

                  Our builder/freeholder liquidated in 2012, six years post-build and ran off with the reserve fund. They managed all of their new-build sites via one management company (limited by shares) and continued to operate this company for 5 years after liquidating. They subsequently liquidated this company in 2017.

                  As residents, we weren't handed an RMC until the lender became the acting freeholder by default in 2013. They set up an RMC for the residents and subsequently resigned as directors in 2015. We now have two resident directors who appointed a new managing agent in 2017 (as secretary) who immediately increased fees by 23%. There is zero transparency and only four members from thirteen attend AGMs in dispute.

                  As residents we are instructed to report any issues to the resident directors one of which is a puppet for her father who pulls the strings from off-site. And if we contact the managing agent directly we are billed for their time. The one director point-of-contact is hard to reach, offers poor communication, zero transparency, and not wanting to offend, has delusions of grandeur. He signs off the accounts when there are obvious challenges and agrees to managing agent recommended products and services without any form of negotiation. He buys premium each time, every time. Example being £300 x 2 for two wooden entrance doors to be repainted.

                  I have other concerns if you have any feedback please?

                  1. I've now established from your good selves that RTM isn't the best option as I'm informed that if and when the freeholder offloads the site, the RMC is fully protected against them appointing their own managing agent and hiking the service charge. This was a big concern. Is this accurate?

                  2. Currently, the service charge payment is made directly into the managing agent's bank account. The reserve fund is an 18% allocation on paper only as we do not have exclusive RMC linked bank accounts for service charges and the reserve fund. None of the directors or members have access to this bank account, only the secretary. Could history repeat itself at some point or does the RMC somehow ring-fence the fund?

                  3. The communal carpets in both blocks (9 and 4 apts.) were blue and are now brown because the referenced director above cleaned them with bleach. The carpets are 12.5 yrs old. Collectively as residents we want these changing, but the managing agent and director insist on building up a big (£40k +) reserve fund with no cap. Residents want to save, spend, save spend, with the prior liquidation in mind.

                  4. By self-managing we can cut the insurance bill in half, £1,500 to £750, negate the agency fees of £3k + 10% of all product and service spend. I have quotes to back this up. Apart from the additional admin and accountancy fees, etc, what are the pros and cons of self-managing under an RMC?

                  5. And finally is RTM definitely not the way forward? I like the sound of RTM, but of course if its pointless then, so be it.

                  Thank You.


                    You may have options regarding the missing funds and suggestions were made on another topic which you started. The managing agent is required to keep monies in a separate client account and the full name of the account should have been advised to you, if not you should request that information.

                    Who owns the freehold interest now following the liquidation of the freeholder Company? If a transfer of title has been made, the leaseholders should have been given the right to purchase the freehold interest.

                    What does the lease say? Who are service charges payable to? Who is responsible for maintaining the property?

                    What rights and obligations does the “RMC” possess? It does not appear to be a party to the leases and a 3rd party cannot just create a Company to assume the benefits and responsibilities of the leases without the consent of all parties involved.

                    At the moment, all you have stated is that a Company has been created, you have become a member of that Company and the Company appears to have the right to appoint a managing agent. It does not follow that the Company has the right to recover costs by charging leaseholders.


                      Could someone please close the other post, it didn't appear at first for a few weeks and since I've learned a lot more about our set-up, so much of that may be incorrect. Thanks.

                      To further clarify. The Lender is the acting freeholder since liquidation. They set up the RMC in 2013 and resigned in 2015. They ignore all our calls, emails and letters. 2 residents are now directors of this RMC since 2016/17, (and their address at Companies House has recently been updated to match the secretary address), the managing agent is the secretary that these 2 directors hired. However, the directors disclose very little to the 11 other residents. Personally I don't think they have a clue what they are doing as directors and are yes men to the agents. They signed the accounts off last year with glaring challenges.

                      I am told by the managing agent that all 13 residents are members, yet the company uses model AoA since inception with zero info. The lender / acting freeholder evidently did the quickest and simplest thing to get shut of us when the original freeholder liquidated, hence why they ignore any contact we make.

                      I spoke with the official receiver back in 2012 and they would not supply any info regarding the missing reserve, but it was never documented anyway, we had no clue what it was, estimates suggest 15k plus. We've written that money off. Not learning from past events the RMC/directors have hired a managing agent (acting as secretary) which has not created an exclusive bank account for the RMC reserve fund and this has created even more unrest with residents.

                      My fifth call to LEASE today has added even more to the mix which may answer your above q's. My older (pre-2012) lease and 5 others' says we pay the builder/freeholder that liquidated, the company I eluded to that continued to trade post liquidation. But when the lender became acting freeholder, they immediately sold the other 7 apartments for cheap and their newer (post-2012) leases detail the new RMC which was created by the new freeholder at that time. My lease does obviously not mention this RMC (limited by guarantee), but does mention the old company (not an RMC) which was limited by shares.

                      I now don't know if the 5 of us with older leases are actually members of the RMC (it uses model articles) or not and should we even be paying into this RMC / managing agent? I can tell you that one of the 5 residents with an older lease has struggled to complete a sale, on going for last 12 months because of some issue with the lease. Being an elderly couple when I spoke with them earlier (they now live off site), they weren't exactly sure what was wrong with the lease, but mentioned the Land Registry and freeholder was perhaps the cause.

                      Bit of a mess. I still wonder if RTM would resolve all of this and prevent a new freeholder in the future buying the plot cheap and appointing their own managing agent to hike the fees up, if only for the 5 older leases, with the RMC protecting the 7 newer leases. Alternatively we may have to update the 5 older leases to match and become part of the RMC.

                      Does anyone offer a low-cost service to checkout an older lease and AoA to confirm where we stand? Not sure where to start.

                      Thanks again.


                        My reply post has been spammed again on edit, why does it keep doing that? Can someone make it live again please.


                          Originally posted by Centurino View Post
                          My reply post has been spammed again on edit, why does it keep doing that? Can someone make it live again please.

                          Send a message to moderator2 requesting it.


                            As 7 newer leases post-liquidation are linked to the RMC formed in 2013 and 6 leases (including mine) are linked to the liquidated company which was not an RMC, do you have any recommendations for someone to read through my lease to see if I actually have to pay the RMC we have now. There is obviously no mention whatsoever of an RMC in my lease.



                              Your lease still exists and your liability is to pay any monies due to whoever has acquired the freehold interest.

                              Are you being charged ground rent? If so, to whom is it payable? Who is charging you service charges? Who has issued the new leases?

                              It looks like someone has acquired the freehold interest but it should have been offered to the leaseholders at the time.

                              It does not appear that you have any obligation to pay anything to the RMC.

                              I think that you need to take all the relevant papers to a solicitor so that he can advise you.


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