What Are The Responsibilities Of A Director Of A UK Right To Manage Company?
Leaseholders who live in flats should consider whether or not they would like to exercise their right to manage (or RTM). Some have already done this process and created their own right to manage company, whereas others have exercised the process but chosen to use an external management company.
If the idea of setting up a right to manage company has come up, you should take some time to consider it properly. You must especially think about what responsibilities you will have to take on if you are planning on being a Director of this company. The role of Director is done by a tenant/s.
The success of a UK RTM company is quite dependent on all the tenants getting along and agreeing on what actions to take. The Director of the company does not make all the decisions on their own, they must have the backing of at least 2/3rds of all the tenants involved in the company. One of the more challenging roles of the Director is to get everyone to make a decision whilst dealing with clashing opinions and personalities of the tenants.
Unfortunately being a Director also means that you are responsible for the finances of the company. This means that if a tenant defaults on a maintenance payment, you as Director could be liable to pay this into the company. Although this sounds hugely unfair, this is part of the role of being a Director of a company. This is why it is extremely important to consider whether or not you want to be a Director if the right to manage company.
You can likely appreciate that being a Director of a UK RTM company can be quite satisfying; you can make decisions which will save you and the other tenants money. It also enables you to take some ownership over the RTM process. However you need to consider that being a Director must fit around your everyday life and it is a job that should not be taken on lightly. You will need to keep yourself up to date with any relevant UK health and safety and building laws. In light of this, although there are benefits to be gained, along with this is lots of responsibility.
About the Author
Bonallack and Bishop are specialist UK RTM solicitors with significant expertise in advising on the formation of a right to manage company (http://righttomanagecompanyuk.co.uk ). Tim Bishop is senior partner at the firm, responsible for all major strategic decisions. He has grown the firm by 1000% in 13 years and has plans for further expansion.
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