RMC Directors' Responsibilities

A practical guide to the legal duties, financial obligations, and compliance responsibilities that come with being a director of a Resident Management Company.

DIRECTORS' GUIDE

What Does Being an RMC Director Involve?

A Resident Management Company (RMC) is a company set up to manage the communal areas and services of a residential block of flats. In many developments, the lease requires leaseholders to be members of the RMC, and a small number of leaseholders serve as directors on the board.

Being a director of an RMC is a voluntary role, and in most blocks the directors are ordinary leaseholders who have stepped forward to take responsibility for the management of their building. It is an important role, and it carries specific legal duties under both company law and property management legislation.

This guide sets out the key responsibilities that come with being an RMC director, the areas where personal liability can arise, and how a good managing agent supports the board in meeting its obligations.

Residential block of flats managed by an RMC board of directors

Legal Framework

An RMC is a private company limited by guarantee, registered at Companies House. As a director, you are subject to the duties set out in the Companies Act 2006, which apply to all company directors regardless of whether the company is a multinational corporation or a small resident management company.

In addition to company law, RMC directors have responsibilities under property management legislation, including the Landlord and Tenant Act 1985, the Commonhold and Leasehold Reform Act 2002, and — for buildings over a certain height or risk profile — the Building Safety Act 2022.

These obligations exist whether or not the RMC appoints a managing agent. While a managing agent handles the operational delivery, the legal responsibility remains with the directors.

Key Responsibilities

The responsibilities of an RMC director can be grouped into four broad categories: governance, financial management, compliance, and building management.

Governance

Holding board meetings, making collective decisions, maintaining proper minutes, filing annual confirmation statements at Companies House, and ensuring the company's articles of association are followed.

Financial Management

Overseeing the service charge budget, ensuring funds are collected and properly accounted for, approving expenditure, reviewing financial reports, and ensuring year-end accounts are prepared.

Health & Safety Compliance

Ensuring the building meets all statutory safety requirements, including fire risk assessments, legionella testing, asbestos management, electrical testing, and lift maintenance.

Building Management

Appointing and overseeing the managing agent, approving maintenance works, planning for major works, and ensuring the communal areas are properly maintained.

Companies Act Duties

The Companies Act 2006 sets out seven general duties that apply to all directors. In the context of an RMC, the most relevant are as follows.

Duty to Act Within Powers

Directors must act in accordance with the company's constitution (its articles of association and, where relevant, the lease). Decisions should fall within the scope of the powers granted to the board.

Duty to Promote the Success of the Company

In an RMC context, this means acting in the best interests of the members (the leaseholders) as a whole. Decisions about expenditure, contractor appointments, and management arrangements should be made with the collective interest of all leaseholders in mind.

Duty to Exercise Independent Judgement

Directors should form their own views on matters that come before the board. While it is appropriate to rely on professional advice from the managing agent, accountant, or solicitor, directors should not simply rubber-stamp recommendations without consideration.

Duty to Avoid Conflicts of Interest

Directors must declare any personal interest that could conflict with the interests of the company. For example, if a director is also a contractor being considered for work on the building, that interest must be disclosed and the director should not participate in the decision.

Personal Liability

One of the most common concerns for RMC directors is the question of personal liability. As a director, you can be held personally liable in certain circumstances.

Directors are not personally liable for every decision that goes wrong. Liability typically arises only where a director has acted negligently, in breach of their statutory duties, or has failed to take reasonable steps to ensure compliance with legal obligations.

The most significant area of personal liability risk for RMC directors is health and safety compliance. If the building's communal areas are found to be unsafe and the directors have failed to take reasonable steps to address known risks, enforcement action — including prosecution — can follow. The Regulatory Reform (Fire Safety) Order 2005 places specific duties on the "responsible person", which in most RMC structures is the directors.

Directors can protect themselves by ensuring the building has up-to-date fire risk assessments, compliance certificates, and a structured maintenance programme. Appointing a competent managing agent who actively manages compliance on the board's behalf is one of the most effective ways to mitigate personal risk.

Companies House Obligations

As a registered company, your RMC has ongoing filing requirements at Companies House. Failure to meet these obligations can result in the company being struck off the register, which can have serious consequences for the management of the building.

Confirmation statement — must be filed at least once every 12 months, confirming the company's details are up to date.
Change of directors — any appointment or resignation of directors must be notified within 14 days.
Registered office address — must be kept current. All official correspondence from Companies House is sent to this address.
Accounts — even small RMCs must file accounts at Companies House, unless exempt. Your accountant or managing agent can advise on the appropriate filing requirements.

The Role of Your Managing Agent

A good managing agent does not replace the board — it supports it. The managing agent handles the operational delivery of the building's management: contractor coordination, financial administration, compliance management, and resident communication. The board retains oversight and decision-making authority.

When evaluating a managing agent, directors should consider whether the agent actively manages compliance (or simply reacts to problems), whether financial reporting is regular and transparent, and whether the person managing the block has the experience and capacity to deliver a consistent service.

If you are unsure whether your current managing agent is meeting these standards, our guide on questions to ask your managing agent provides a practical framework for evaluation.

Compliance Management

We manage the full spectrum of health and safety obligations, maintaining a live compliance calendar and risk register for your building.

Transparent Reporting

Regular financial reports, budget reviews, and portal access so directors always have the information needed to fulfil their oversight duties.

Dedicated Partner

Your named Partner attends board meetings, provides professional guidance, and acts as the operational arm of your RMC — so directors can focus on oversight rather than administration.

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COMMON QUESTIONS

Frequently Asked Questions

Am I personally liable as an RMC director?

Directors can face personal liability if they act negligently, breach their statutory duties, or fail to take reasonable steps to ensure compliance — particularly in relation to health and safety. However, directors who act in good faith, take professional advice, and appoint competent agents to manage compliance are well-protected against personal liability claims.

Do RMC directors get paid?

In most cases, no. RMC directors are volunteers — they are leaseholders who give their time to oversee the management of the building. Some larger developments may provide a modest fee or expenses reimbursement, but this is not the norm.

How many directors does an RMC need?

The minimum requirement depends on the company's articles of association. Most RMCs require at least two directors. In practice, having three or more directors provides better resilience and ensures decisions can be made if one director is unavailable.

Can I resign as a director?

Yes. Directors can resign at any time by giving notice in accordance with the company's articles. The resignation must be notified to Companies House within 14 days. If your resignation would leave the company below the minimum number of directors, the remaining members should appoint a replacement.

What happens if our RMC is struck off by Companies House?

If the RMC is struck off, its assets (which may include the freehold or management responsibilities) revert to the Crown. This can create significant complications for the building's management. Keeping on top of Companies House filings — particularly the annual confirmation statement — is essential to prevent this.

Need Support for Your RMC Board?

A free consultation with one of our Partners will help you understand how Pearl can support your board with compliance, financial reporting, and day-to-day management.