RTM conflict of interest

[shuey]

Dear LLZ members

I had a few queries that I would be grateful for clarification on, in relation to RTM arrangements.

-Are representatives of directors of RTM companies allowed to carry out services e.g. gardening, cleaning, for money, or is this a conflict of interest?
- Under what circumstances can directors and officers be removed from a company?
-If a representative for a director has had insurance declined previously, and this was not declared to the D&O fact find on initial questioning (given that it is the representative rather than the director), is this something that would void the D&O insurance policy? If so, are there any ways around this situation to ensure that the policy is still valid?

Thanks in advance for advice

[eagle2]

It is unclear what you mean by representatives, will you please explain,

The directors should comply with the Articles of the RTM Company, the model Articles 19 state that conflicts of interest should be declared and the director concerned should not participate in the decision making process.

Directors and officers can be removed by a majority vote at a meeting of .members.

The proposal form for the insurance should be completed accurately, so you should check it. The reply to your question depends on what you mean by "representatives" and whether or not there is a relevant fact which should be disclosed.to the insurer and which would influence the insurer's decision to accept the risk.You could approach the insurer and disclose the information now if it is relevant. That may result in the insurer declining the risk or increasing the premium but it would be unable to state that it was unaware if and when a claim is made.

[shuey]

Thanks. I was told that Under Article 10 of the RTM rules apparently a director can delegate their duties and powers to a nominated representative.

[eagle2]

Article 10 is intended to allow directors to form sub committees to report back to the directors and a director to appoint a specific person to act on behalf of that director eg in case of illness or absence. The members of the Company have the power to change the Articles if they so wish,

[Gordon999]

The RTM rules are on this link :

https://www.legislation.gov.uk/uksi/2009/2767/made

Under clause 24, Directors are not entitle to remuneration.

[ram]

Thanks. I was told that Under Article 10 of the RTM rules apparently a director can delegate their duties and powers to a nominated representative.

if you had only one director for 10 flats, He / she can delegate their duties to a) a leaseholder who is an accountant b) a person to engage workmen and ensure the property is well maintained by the tradesmen. c) delegate their duties to other mere mortals at the property for mundane tasks, checking the car park for unauthorised cars, cos the director is out at wsork all day.

Directors are there to run the property, and not to profit from a director cutting the grass.

The Director will not have insurance to cover himself if as a result of his gardeing actions, some one is hurt, therefore he should be stopped from acting as a paid tradesman.Directos only delegate their duties as one would in an office. Directors do not put on overalls and do the maintenence work -- end of.

[Gordon999]

Section 16 of the RTM Rules :

Quorum for directors’ meetings

16.—(1) At a directors’ meeting, unless a quorum is participating, no proposal is to be voted on, except a proposal to call another meeting.

(2) The quorum for directors’ meetings may be fixed from time to time by a decision of the directors, but it must never be less than two, and unless otherwise fixed it is two.

(3) If the total number of directors for the time being is less than the quorum required, the directors must not take any decision other than a decision—

(a)to appoint further directors, or

(b)to call a general meeting so as to enable the members to appoint further directors.