What Are RMC’s Responsible For?

IPM explore what it means when you are a Director of an RMC.

So each year you pay an amount of money to your property managing agent. You get a budget with lots of categories, which you may be unsure of. You then get a set of accounts saying what the property manager has spent your money on after the year is over.

What are the Directors of Resident Management Companies (RMC) responsible for?

Fundamentally, the Directors of your RMC must act in a way that promotes the success of the development to which they are a Director of.

They have the responsibility to make decisions that are in the best interest of the company members (usually the leaseholders) have to justify their reasoning. What this means is that the Directors must make the best decisions possible for the development.

Managing Agents Financial Update

Most Directors of RMC’s meet on a quarterly basis to review various information and factors, including the financial health of the building.

Below are the financial reports you must receive:

  • Budget vs Spend to date
    This is an ongoing report highlighting what was budgeted for at the beginning of the year and what has been spent in that category up to a specific date. Ideally the amount spent to date should tally up with the amount to be spent for the rest of the year
  • Service Charge Arrears
    This is probably the most important report. Service Charges are the essential component of the management service income which is required to invest back into the development.
  • Cashbook report
    It is important to find out the ‘cash flow’ status of the building. A periodic cashbook is essential to Directors. Clear analysis of exactly where money is being spent can allow Directors to make better financial decisions for the building over the financial year.
  • Bank Balances
    A simple summary which compliments the other financial reports above. With buildings potentially having multiple bank accounts for service charges, reserve funds, sinking funds, an overall view of the balances can be a useful insight.

Your Managing Agents Maintenance Update

With the financial information being of upmost importance, it is essential to review this first.

After that has been completed, your Managing Agents now need to provide an update on maintenance and strategy, both completed to date and for the rest of the year.

Upon commencement of IPM’s management service our team hold regular meetings with leaseholders. This enables us to ensure we manage any requests, maintenance issues or concerns. promptly to reduce time and cost to all parties.

With the latest in property management software you can view, pay and manage all matters to do with your development on-line using our tenant portal.

Benefits of Using a Property Management Agent

Using a Block Management Agent

This article provides basic guidance on why you should appoint a managing agent, where leaseholders are subject to the payment of a service charge. It is particularly relevant if you are a director of a resident management or right to manage company with a block of flats.

Flat-owners may acquire management responsibilities in different ways: through acquisition of the freehold of the building, through the statutory Right to Manage (RTM) or simply by delegation of the management responsibilities from the landlord. Whatever the route, the management is normally exercised through some form of resident management company (RMC). The RMC will assume responsibility for the management and repair of the building, and for compliance with the obligations of the lease and the wide range of relevant statutory requirements. It will have to assess how best to achieve this, usually by appointment of a professional block managing agent.

The role of a residential block managing agent today is a complex one and requires a highly professional approach. To carry out the role requires knowledge of landlord and tenant law, building construction, Health and Safety regulations, basic accounting and more.

Professional managing agents bring an organised approach to the planning and collection of the service charges and reserve funds, the timetables for redecoration, repairs, inspection and supervision of works.

Their assessment of what must be done, and when, will be independent of private interests and preferences, and based solely upon their duty to keep the premises in good repair. The process of collecting funds and the responsibility for taking steps to recover unpaid charges will fall under the responsibility of the managing agent.

A managing agent handles all the mundane and time-consuming administration. If issues and disputes arise, these can be dealt with impartially by the managing agent who’s primary goal is to ensure they site is well maintained and stays in good condition.

Managing agents should hold professional indemnity insurance as a further protection against negligent acts or incompetence and have the responsibility for compliance with leases, laws and codes of practice.

For more information about the services covered by our team at Inspired Property Management or to discuss your potential site management requirements, please speak to one of our Property Management Experts who can advise you further.