What a residents’ management company director is responsible for

A residents’ management company director is responsible, with the other directors, for running the company that manages the block. That means meeting the company’s obligations under the leases, keeping its finances and Companies House filings in order and complying with landlord and tenant law. The duties are owed to the company under the Companies Act 2006.

Most directors are leaseholders who volunteer, often because somebody had to. The role is usually unpaid, but it is not informal. This article sets out what the law expects of a director, what can be handed to a managing agent and where personal liability can arise.

What is a residents’ management company?

A residents’ management company is a company, usually owned by the leaseholders as its members, that manages a block and sometimes owns the freehold. Its directors make decisions on the company’s behalf.

Some companies own the freehold outright, often after the leaseholders bought it together. Others are a party to each lease alongside a separate freeholder, with responsibility for repairs, insurance and services. A company set up when leaseholders exercise the right to manage is a right to manage company, with its own statutory framework. In every case, the leases and the company’s articles of association together define what the company must do.

What duties does an RMC director have under the Companies Act 2006?

Sections 171 to 177 of the Companies Act 2006 set out seven general duties, all owed to the company. For most management companies the ones that matter day to day are acting within the company’s powers, exercising reasonable care, skill and diligence and avoiding conflicts of interest.

The full list is: to act within powers (section 171), to promote the success of the company (section 172), to exercise independent judgment (section 173), to exercise reasonable care, skill and diligence (section 174), to avoid conflicts of interest (section 175), not to accept benefits from third parties (section 176) and to declare an interest in a proposed transaction or arrangement (section 177).

The care and skill duty is measured against what can reasonably be expected of someone in the role. If a director’s own knowledge and experience go further, the higher standard applies, so a director who is a surveyor or an accountant will be judged accordingly. Declaring interests matters in small blocks, where a director may have a personal stake in works near their own flat or a connection with a contractor.

What must an RMC file at Companies House?

The company must file annual accounts and a confirmation statement each year and report any change of director. Since 18 November 2025, directors must also verify their identity with Companies House.

Accounts are delivered under section 441 of the Companies Act 2006 and the confirmation statement under section 853A. Changes of director, including resignations, must be notified within 14 days under section 167. Under the Economic Crime and Corporate Transparency Act 2023, new directors must verify their identity before they are appointed; existing directors must do so by the company’s first confirmation statement after 18 November 2025. Late accounts bring automatic penalties for the company. Failing to file can also be an offence by the directors.

These company accounts are separate from the service charge accounts that leaseholders receive, which are a matter of landlord and tenant law and are explained in our guide to reading a service charge statement properly.

What landlord obligations does the company have?

If the company is the landlord, or is named in the leases as responsible for services, it carries the statutory obligations that come with that role. The directors are responsible for making sure it meets them.

The main ones are these. Service charges must be reasonable under the Landlord and Tenant Act 1985, section 19. Major works and long term contracts above the thresholds need consultation under section 20. Service charge money is held on trust under the Landlord and Tenant Act 1987, section 42. Demands must include the landlord’s name and address under section 47 of the 1987 Act, with an address for service in England or Wales given under section 48.

The company is also usually the responsible person for the common parts under the Regulatory Reform (Fire Safety) Order 2005, a duty covered in our article on fire safety duties for buildings under eighteen metres. If the building is at least eighteen metres tall or has at least seven storeys, with two or more residential units, Part 4 of the Building Safety Act 2022 may make the company an accountable person with further duties to manage building safety risks.

Can RMC directors be personally liable?

Generally not: the company is a separate legal person, so its contracts and debts are its own. Directors can become personally liable if they breach their duties, act outside their powers or let the company carry on when it cannot pay its debts.

The last of these is wrongful trading under section 214 of the Insolvency Act 1986. It can apply in an insolvent liquidation where a director knew or ought to have concluded that liquidation could not reasonably be avoided and did not take every step to reduce the loss to creditors. For a management company the practical risk is a service charge shortfall that leaves contractors unpaid. Directors and officers insurance covers some of this exposure. It is worth confirming each year that the company has it and what it covers.

What can RMC directors delegate to a managing agent?

Tasks can be delegated; responsibility cannot. A managing agent can collect service charges, arrange repairs and insurance, run consultations and prepare accounts, but the directors remain responsible for supervising the agent and for decisions taken in the company’s name.

Good practice is a written management agreement setting out exactly what the agent does, regular reports to the board and a short annual review of performance. Directors should still read the budget, the accounts and the fire risk assessment themselves. They should also expect the agent to bring a planned maintenance programme to the board each year rather than a list of emergencies.

What this means for your block

If you are a director, three things are worth checking now: that every director has verified their identity with Companies House, that the company’s filings are up to date and that the board has seen the current fire risk assessment and service charge budget. Beyond that, the role is manageable with a clear agreement with the managing agent, proper minutes of decisions and a habit of declaring interests. Leaseholders thinking of standing should not be put off. The duties are real but well defined. A well supported board can meet them comfortably.

Frequently asked questions

Are RMC directors paid?

Usually not. Whether directors can be paid depends on the company’s articles of association. Most residents’ management companies are run by unpaid volunteers.

Does an RMC director have to be a leaseholder?

Not by law, but the articles of association often limit membership to leaseholders and may set rules about who can be appointed as a director.

How does an RMC director resign?

By giving notice to the company in line with its articles. The company must notify Companies House within 14 days. Under section 154 of the Companies Act 2006 a private company must always have at least one director.

This article describes the position as at October 2026 and is general information rather than legal advice. Anyone making a decision about their own building should take proper advice on it.