Right to manage

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    Right to manage

    Where a right to manage has been granted, and group of Leaseholders form a RTM Ltd, then higher a managing agent, isn't it for the RTM Ltd to keep accounts, and the managing agent is a cost expenditure?
    Currently the RTM is filing dormant accounts, and the directors are allowing the hired managing agent to manage and file their own yearly accounts (poorly) surly that is a breach of company law and the agreed RTM?

    #2
    Our company accounts are all dormant. This means that the company must not trade. My (rather poor understanding) is that this is perfectly legitimate and avoids some complications while creating others. But the service charge account and the managing agent expense is NOT part of company accounts. That is not what is filed at companies house. The company is simply a custodian of those other accounts.

    So no, dormancy is not in breach of company law. But I think it means that some aspect (like collection of ground rents - more relevant for a RMC) are tricky

    Comment


      #3
      RTM Co accounts should be dormant. What you describe as your hired managing agent filing their own yearly accounts is a legitimate thing for the managing agent to be doing - simply recording the income and expenditure of the building. This is not the income and expenditure of the RTM Co though which is why the RTM Co should be filing dormant accounts.

      Comment


        #4
        The purpose of the RTM company is to take over the service charge account from the freeholder. The RTM is a non-profit company which has no ground rent income under the lease and it does not trade with external parties. It always files annual returns to Companies House as a dormant company.

        The RTM company can appoint an external managing agent or a leaseholder to manage the leaseholders's payments into service charge account. The managing Agent's service should comply to RICS Residential Management Code which is the benchmark used by FTT.

        Comment


          #5
          Originally posted by Gordon999 View Post
          The purpose of the RTM company is to take over the service charge account from the freeholder. The RTM is a non-profit company which has no ground rent income under the lease and it does not trade with external parties. It always files annual returns to Companies House as a dormant company.

          The RTM company can appoint an external managing agent or a leaseholder to manage the leaseholders's payments into service charge account. The managing Agent's service should comply to RICS Residential Management Code which is the benchmark used by FTT.
          Exactly. For RMC companies likewise, though it is trickier to be dormant whgen ground rents are involved (as they might, and possibly should, still be)

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            #6
            Ground rent is not due to an RMC so it probably ought not be collecting it. The RMC shold be collecting only proportionate service charge provisions and insurance premia, whether or not due as service charge or rent in arrear

            Comment


              #7
              Originally posted by flyingfreehold View Post
              Ground rent is not due to an RMC so it probably ought not be collecting it. The RMC shold be collecting only proportionate service charge provisions and insurance premia, whether or not due as service charge or rent in arrear
              Ground rent might be due to a RMC (Residential Management Company owning the freehold) but not to a RTM Company.

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