Right to Manage director responsibilities: what are you really taking on?

You have won the right to manage your building, or you are seriously weighing it up. Either way, the same question tends to land next: what does the person actually running the show have to do?

Here is the short version. A Right to Manage director is a leaseholder who helps run the company that takes over management of the building from the freeholder. You look after the money, the maintenance, the safety and the paperwork, either doing it yourselves or overseeing the people you bring in. It is a real legal role with real duties, but it is far more manageable than most people fear, and you never do it alone.

In this guide:

• How you become a Right to Manage director
• What the RTM company is actually responsible for
• Your legal duties, in plain terms
• The honest bit: liability, time and whether you are qualified
• Whether you have to hire a managing agent
• Where to start

How you become a Right to Manage director

When leaseholders take control through the right to manage, they set up a special company, called a Right to Manage (RTM) company, and become its members. Some of those members then step up as directors to run it. You do not need to be a landlord, a lawyer or a property professional. You need to be a leaseholder who is willing to help steer the building.

An RTM company must have at least two directors, and it can have more. The role is voluntary, and directors are not paid. There are very few barriers to taking it on: you need to be 16 or over and not disqualified or bankrupt, and while directors do not strictly have to be leaseholders themselves, in practice they usually are. Because the company is limited by guarantee, your financial liability as a member is capped at just one pound. If you want a refresher on how the right to manage itself works, start with our guide to what Right to Manage is and how it works.

What the RTM company is actually responsible for

This is the key thing to understand: it is the company, not you personally, that takes on the landlord's management duties set out in your lease. In practice, that usually covers:

• keeping the structure and shared areas repaired, decorated and maintained, including cyclical jobs
• running the shared services: cleaning, lighting, heating, grounds, lifts and boilers
• arranging the buildings insurance
• setting a budget, then charging and collecting service charges, and keeping proper accounts
• meeting the building's legal duties, including fire safety and building safety
• dealing with breaches of the lease and granting approvals

That list is essentially the map of this series. Each item gets its own guide, from handling service charges and budgets to major works and Section 20 consultation and keeping the building safe and compliant. There are also recognised standards to follow, such as the RICS Service Charge Residential Management Code, which set out how a well-run building should operate.

Your legal duties, in plain terms

Because you are now helping run a company, you also take on the general duties that every UK company director has under the Companies Act 2006. In plain terms, that means acting within the company's rules, making decisions in good faith for the benefit of all the leaseholders, using your own judgement, taking reasonable care, avoiding conflicts of interest, and not taking payments or perks from suppliers.

It also means keeping the company legal. Each year the RTM company files a confirmation statement and accounts at Companies House. These are usually short, and Companies House sends reminders. Keeping the company in good standing matters, though: a company that is struck off can no longer carry on managing the building. We cover the company side in full in the next guide in this series.

The honest bit: liability, time and whether you are qualified

It would be easy to make this sound effortless. It is not nothing, so here is the straight version.

On liability, an RTM company is a separate legal entity, and the directors are legally responsible for the decisions the company makes. If something goes wrong, for example a breach of building safety rules, enforcement is normally taken against the company rather than the individual directors. You can still be personally liable in certain circumstances, such as if you have been negligent or, in serious cases, criminally complicit. Some boards choose to take out directors' and officers' insurance for extra peace of mind.

On time and skill, you are not expected to do everything yourself, or to know it all on day one. Directors can appoint a professional managing agent, or bring in accountants and contractors, to handle the technical and day-to-day work while staying the people in charge. In many parts of the world, residents running their own buildings is completely normal, not some daunting exception. As one leaseholder we spoke to put it: "I feel like property management is quite a low touch job, it's not actually that hard."

The most common worry is that self-management will descend into chaos. It is a fair concern, and it is exactly why the structure exists. The company runs on a standard set of rules (its model articles), the directors have clearly defined duties, and there are recognised codes of practice to follow. Those are the guard rails that keep things orderly.

Do you have to hire a managing agent?

No. An RTM company can appoint a professional managing agent to handle the day-to-day work, self-manage entirely, or land somewhere in between. An agent lightens the load but adds cost. Self-managing keeps both the control and the fees in residents' hands, and asks a little more of the directors. It is a genuine choice, and we walk through it properly in the final guide of this series. If you want to see what self-managing can be worth in pounds, our guide on whether your building could save thousands does the maths.

Where to start

Before any of this, the first step is simply checking that your building qualifies and getting your neighbours on side. Recent reforms have made the right to manage more widely available and cheaper to claim, so more buildings than ever can take this route. Check whether your building qualifies and see who else is in.

Sources and further reading

• LEASE (Leasehold Advisory Service): Running a right to manage company
• LEASE: Members and directors
• LEASE: About the right to manage
• GOV.UK: Leasehold toolkit for England
• legislation.gov.uk: Commonhold and Leasehold Reform Act 2002 and Companies Act 2006