Directors of an RTM or management company.
In short
Directors of an RTM company or a residents' management company are company directors under the Companies Act 2006, with the general duties that brings: to act within the company's powers, promote its success, use independent judgment, take reasonable care, and avoid conflicts of interest. On top of that the company carries the management duties under the leases or, for an RTM company, the landlord's management functions: services, repairs, maintenance, improvements, insurance and management.
What are a director's legal duties?
The general duties in sections 171 to 177 of the Companies Act 2006: act within the company's constitution, promote the success of the company for its members, exercise independent judgment, exercise reasonable care, skill and diligence, avoid conflicts of interest, not accept benefits from third parties, and declare any interest in a proposed transaction, such as a contract with a firm a director is connected to.
What does an RTM company take over?
The landlord's management functions under the leases, which the 2002 Act defines as functions with respect to services, repairs, maintenance, improvements, insurance and management. The freehold stays with the landlord, and some matters, such as ground rent, stay with the landlord too.
What must the company file?
At least a confirmation statement and annual accounts at Companies House each year, kept up to date with changes of directors and of the registered office. Service charge money held on trust is not the company's own income, so many such companies are dormant for corporation tax; interest earned on the service charge fund is taxable. Take an accountant's advice on your company's own position.
Are directors personally liable?
A director is not generally liable for the company's debts, but can be liable for breaching their duties, and the company can be liable for failings in the building. Many boards take directors' and officers' insurance. A high-rise building of at least 18 metres or seven storeys has extra duties under the Building Safety Act 2022, and specialist help is wise.
Where Servanda comes in
Servanda gives a board the record a careful director wants: who decided what and when, every check and certificate with its date, every demand and payment, and the year end for the accountant, with an audit trail on every change.
Everything Servanda doesThe law
- Companies Act 2006, directors' general duties (sections 171 to 177)
- Commonhold and Leasehold Reform Act 2002, Part 2, Chapter 1 (right to manage)
- Building Safety Act 2022
The legislation is the authority; this page is a plain summary for England, checked on 2026-10-23. Wales and Scotland have their own rules. Take advice on any particular building.