What's the difference between an RMC and RTM Company?

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    What's the difference between an RMC and RTM Company?

    I am one of the Volunteer Directors of a Residents Management Company which appoints a third party (Countrywide) as our Managing Agent, to run the estate on our behalf.

    I am considering putting out the Managing Agent contract to tender to gauge Countrywide's competitiveness.

    As part of this I have been reading around the subject of the "Right to Manage".

    It isn't clear to me if a RTM Company and RMC Company differ in any way.

    Could anyone illuminate?

    #2
    An RMC is most often a party to the lease who undertake virtually all of the functions and responsibility associated with a landlord.

    There is a FH, the RMC, and the lessee. SO in a 2 party lease the FH arranges services, in a 3 party lease, the RMC promises to the LH and FH that they will do that instead.

    The RTM is a company that exercises a right to take away that role. It is used on freeholders and head lessors but can be used where there is a manager in the lease, often an external management firm, or in rare cases a RMC where the majority of leaseholders are unhappy with the incumbent resident directors.

    Or in cases of stupidity where my client had rescued an RMC from liquidation, I sorted it all out and it was to be handed over work done and money in the bank at the end of the financial year, and get this, the freehold for a £1, but on the advice of an on-line agent exercised RTM. And they got it wrong.

    I explained it all but they wouldn't listen so out of spite the LL sold it to one of the factory agents so they have to pay them insurance and ground rent and all their fees.
    Based on the information posted, I offer my thoughts.Any action you then take is your liability. While commending individual effort, there is no substitute for a thorough review of documents and facts by paid for professional advisers.

    Comment


      #3
      Originally posted by flashharry View Post
      I am one of the Volunteer Directors of a Residents Management Company which appoints a third party (Countrywide) as our Managing Agent, to run the estate on our behalf.

      I am considering putting out the Managing Agent contract to tender to gauge Countrywide's competitiveness.
      The web is full of pages that will say oh yes sack X.

      I am offering a different perspective. Firstly no agent is a contractor, they arrange services, so their management fee aside competitiveness of your total service charge depends on the service and cost of the suppliers. An agent only arranges, the suppliers are not subcontractors,and SC is not the agents "fee" or their SC..

      Changing an agent ends up with someone else doing the same thing and installing their band of suppliers and people are happy saving Y % not knowing if that is in fact an optimum solution.

      You are far better off whatever you do by
      1: understanding what services are provided at your block
      2: is that the service level that you want or need
      3: Is the current standard being met

      That applies to cleaning to the lift contractor to the agent themselves.

      You can then address the options and that is basis for a tender to new agents OR to get the current agent to review the current SC. The more thorough you are the better the outcome. And the less likley to fall for their shiny happy salesperson and their very very standard sales pitch.

      I will be frank and say that with the exception of the "factory" agents where you get sucked in to their way, the quality of service falls on the quality of the manager,and many agents claim a USP, but they don't have one at all.

      I would suggest that if you do the above that you meet with someone at a senior level and the manager and review what you want to achieve and address their shortcomings over an agreed period.

      In most cases this can be done over 4-6 weeks with a good plan and realistic time-scales. You can even add firms that you have found to tender.

      Simply binning an agent is not only huge upheaval but there is rarely a quantitative understanding of what they will actually do that you think is "better".

      And agents are sometimes lazy wake them up on what services are being provided and on tendering contractors.
      Based on the information posted, I offer my thoughts.Any action you then take is your liability. While commending individual effort, there is no substitute for a thorough review of documents and facts by paid for professional advisers.

      Comment


        #4
        Originally posted by leaseholdanswers View Post
        Or in cases of stupidity where my client had rescued an RMC from liquidation, I sorted it all out and it was to be handed over work done and money in the bank at the end of the financial year, and get this, the freehold for a £1, but on the advice of an on-line agent exercised RTM. And they got it wrong.
        Derailing the thread a little. If I read this right:

        You had: FH, named in the lease RMC carrying out management and lessees.
        RMC was going down and you rescued, with the offer of freehold thrown in for the RMC.

        Instead, Lessees decided (stupidly) to ignore this and exercise RTM, thereby losing freehold and getting caught up with 'factory agents' (as you call them) charging silly (ie wrong) ground rents, fees and the like.

        Why? Why did they do this?

        Comment


          #5
          Originally posted by leaseholdanswers View Post
          An RMC is most often a party to the lease who undertake virtually all of the functions and responsibility associated with a landlord.

          There is a FH, the RMC, and the lessee. SO in a 2 party lease the FH arranges services, in a 3 party lease, the RMC promises to the LH and FH that they will do that instead.

          The RTM is a company that exercises a right to take away that role. It is used on freeholders and head lessors but can be used where there is a manager in the lease, often an external management firm, or in rare cases a RMC where the majority of leaseholders are unhappy with the incumbent resident directors.

          Or in cases of stupidity where my client had rescued an RMC from liquidation, I sorted it all out and it was to be handed over work done and money in the bank at the end of the financial year, and get this, the freehold for a £1, but on the advice of an on-line agent exercised RTM. And they got it wrong.

          I explained it all but they wouldn't listen so out of spite the LL sold it to one of the factory agents so they have to pay them insurance and ground rent and all their fees.
          Is this to say that a RTM company is in fact a RMC, born from a 2 party lease to create a 3 party lease between FH, LH and new RMC?

          Would my understanding be correct if I said that an RMC already has the right to manage because it is made up of members and they appoint a Managing Agent / undertake and co-ordinate the effort themselves?

          In my particular case, we have a 3 party lease and the RMC appoints Countywide.
          Last edited by flashharry; 07-06-2012, 12:26 PM. Reason: More detail

          Comment


            #6
            Originally posted by leaseholdanswers View Post
            The web is full of pages that will say oh yes sack X.

            I am offering a different perspective. Firstly no agent is a contractor, they arrange services, so their management fee aside competitiveness of your total service charge depends on the service and cost of the suppliers. An agent only arranges, the suppliers are not subcontractors,and SC is not the agents "fee" or their SC..

            Changing an agent ends up with someone else doing the same thing and installing their band of suppliers and people are happy saving Y % not knowing if that is in fact an optimum solution.

            You are far better off whatever you do by
            1: understanding what services are provided at your block
            2: is that the service level that you want or need
            3: Is the current standard being met

            That applies to cleaning to the lift contractor to the agent themselves.

            You can then address the options and that is basis for a tender to new agents OR to get the current agent to review the current SC. The more thorough you are the better the outcome. And the less likley to fall for their shiny happy salesperson and their very very standard sales pitch.

            I will be frank and say that with the exception of the "factory" agents where you get sucked in to their way, the quality of service falls on the quality of the manager,and many agents claim a USP, but they don't have one at all.

            I would suggest that if you do the above that you meet with someone at a senior level and the manager and review what you want to achieve and address their shortcomings over an agreed period.

            In most cases this can be done over 4-6 weeks with a good plan and realistic time-scales. You can even add firms that you have found to tender.

            Simply binning an agent is not only huge upheaval but there is rarely a quantitative understanding of what they will actually do that you think is "better".

            And agents are sometimes lazy wake them up on what services are being provided and on tendering contractors.
            Sound advice.

            It would be fair to say that the Manager representing Countywide that I am dealing with is an AIRPM with a backwards appreciation of who works for who when she can actually be bothered to respond to my correspondence...

            After reviewing the latest Service Charge it has prompted suspicion that the Agents flat fee is not neccessarily competitive (and I consider their fee as a seperate charge to the disbursements of their appointed subcontractors for matters such as Gardening, Directors & Officers insurance, Electricity, Cleaners)

            Comment


              #7
              It started with a new build of 180 odd flats and a run down block on the road there. Two flats were boarded up and the front door was missing. The electric was cut off.

              The lessees had the RMC, but had failed to recover SC, two flats were repossessed, and several were retirees asset rich but cash poor, and there was a complete horlicks on the administration. Lets not discuss the hole in the roof and the jungle...

              One of the repossessee's owned the freehold ( which reserved the right to insurance and collect rents) and was happy to sell his shares, as were the RMC shareholder lessee's.

              The two flats were also bought by my client who renovates and rents out on AST's long term, and in the jungle, built two flats, which gave him a profit and a big cash sum into their new reserve fund, as well as the work done on the rest of the block at cost and net of VAT, fines paid and suppliers paid off.

              My client had no long term interest and wanted to hand it over and retain one share per flat for the four that he owned out of 20. They would get back their shares one per flat for the original 16 of 18, and the shares in the FH company would be "sold" for £1 to the RMC. We had no interest in long term management it was small fry and were happy to hand over should they choose to self manage or appoint another.

              People have short memories and in part out for stupidity and wanting to reduce costs- the asset rich cash poor who had been bailed out but complained bitterly about everything even though it was free- latched onto RTM and just could not understand they could have the control the next day if they wanted!

              Their advisor's were anxious for their fee for RTM and pressed on with RTM. We shared the view ungrateful wotsits, and that's why the freehold shares and RMC shares were sold off, and their advisor exercised RTM on the RMC, excluding them from control over the insurance! The AST's were also sold off.

              Fast forward 8 years ish and it's a tired block once again.
              Based on the information posted, I offer my thoughts.Any action you then take is your liability. While commending individual effort, there is no substitute for a thorough review of documents and facts by paid for professional advisers.

              Comment


                #8
                Originally posted by flashharry View Post
                I am one of the Volunteer Directors of a Residents Management Company which appoints a third party (Countrywide) as our Managing Agent, to run the estate on our behalf.

                I am considering putting out the Managing Agent contract to tender to gauge Countrywide's competitiveness.

                As part of this I have been reading around the subject of the "Right to Manage".

                It isn't clear to me if a RTM Company and RMC Company differ in any way.

                Could anyone illuminate?
                As a director of the RMC, you have the right to seek quotes from alternative managing agents and if another company found more suitable propose replacing of existing managing agent. Check out the existing managing agent's service contract regarding notice period for termnating service.

                The lease is a legal contract and leaseholders must pay service charge to the Lessor or RMC which starts operating after the building has been completed.

                Some leases ( e.g Bellway Homes ) are worded to say the the building insurance premium must be paid to the Lessor which is not satisfactory when the freehold title is taken by a rip-off landlord.

                So to change the existing legal setup, a majority of leaseholders ( +50%) must organise to set up a RTM company to claim the legal right to run the service charge account and other duties under the lease ( excluding collection of ground rent and matters on forfeiture ) from the existing freeholder.

                Comment

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