A Residents’ Management Company (RMC) is a type of non-profit company that is composed of the residents of a given block or estate and oversees the management of the property, and the units inside it.
Upon corporation, each resident will become a shareholder in the company, meaning that they become responsible for the management of the building.
Usually, an RMC is set up by the original developer of a block or estate to establish a management solution that is agreeable to all involved parties.
A Resident Management Company is typically responsible for:
- The day-to-day management of the property
- The common areas of the building (such as corridors and stairways)
- Tending to any gardens or outdoor areas
- Ensuring the building is legally compliant and safe to live within
- Collecting, budgeting for, and allocating the service charge
- Etc.
RTM vs. RMC: Are they the same?
A common misconception is that RMCs are identical to Right to Manage (RTM) companies, and can be used interchangeably.
In truth, they are completely separate legal entities and are typically used for different purposes.
In most common practices, RMCs are established by the original developers of an estate, so that when they hand over the building, management responsibilities go to the residents, rather than a third party, whereas RTM is exercised as a method to gain control over the management of the building, typically after mismanagement, or unsatisfied leaseholders.
Once established, Residents’ Management Companies do indeed function similarly to RTM companies, in that, the management responsibilities of the block are overseen by qualifying leaseholders (directors), and the company operates via a democratic system of voting to appoint directors and approve decisions relating to the service charges.
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