RMC: Company Managing Leasehold Block — May Hold Freehold or Manage Under Contract — Directors Have Full CA 2006 Duties — Companies Act Filings: CS01; Accounts; PSC; Directors Within 14 Days — LTA 1985 Service Charge: Reasonable; Section 20 Consultation Above £250/Leaseholder; Separate Trust Accounts — LTA 1987 Right of First Refusal on Freehold Sale — RTM vs RMC: RTM Is Statutory (CLRA 2002); RMC Is Contractual

Residential Management Company UK 2026 — RMC Director Duties, Service Charge Governance and RTM vs RMC

Residential Management Company guide 2026: RMC manages leasehold block (common parts; service charge; contractors); may hold freehold. Directors' CA 2006 duties: act within powers; promote success (s.172); independent judgment; reasonable care; avoid conflicts (s.175); no third-party benefits; declare interests (s.177/182). Companies Act compliance: annual confirmation statement (CS01; £34); annual accounts; PSC register; director changes within 14 days. Service charge LTA 1985: reasonable; Section 20 consultation (qualifying works over £250/leaseholder); separate trust accounts (s.42); prescribed demand form (s.21 summary). RTM vs RMC: RTM statutory right under CLRA 2002 (no freehold purchase required; freeholder retains freehold); RMC is private/contractual. LTA 1987 right of first refusal: criminal offence to sell freehold without first offering to qualifying tenants. D&O insurance. ARMA/RICS managing agents. Leasehold and Freehold Reform Act 2024.

12 min readUpdated 7 June 2026Last reviewed: 17 May 2026leaseholdrmcservice-chargecompanies-act

RMC director duties under Companies Act 2006

All 7 CA 2006 director duties apply: act within powers (s.171); promote success (s.172 — benefit all leaseholder-shareholders); independent judgment (s.173); reasonable care, skill and diligence (s.174); avoid conflicts (s.175 — declare contractor relationships); no third-party benefits (s.176); declare interests in transactions (s.177/182). Personal liability for breach; D&O insurance recommended (typically £150-£500/year for a small block).

Companies Act filings and LTA 1985 service charge governance

Companies House: CS01 annual confirmation statement (within 14 days; £34); annual accounts (abridged or dormant); director changes within 14 days (AP01/TM01/CH01); PSC register maintained. Service charge LTA 1985: charges must be reasonable; Section 20 consultation before qualifying works over £250/leaseholder (or cap at £250/leaseholder); service charges held in separate designated trust account (s.42); demand must include s.21 summary of rights and obligations leaflet.

RTM vs RMC, Right of First Refusal and managing agents

RTM (CLRA 2002): statutory right to take over management without buying freehold; freeholder retains freehold; no consent required. RMC: contractual/private; may hold freehold. LTA 1987 right of first refusal: if RMC holds freehold and wishes to sell — must first offer to qualifying tenants (leaseholders) at same price; failure is a criminal offence. Appoint ARMA/RICS-regulated managing agent for day-to-day management; directors retain overall governance.

Templates recommended in this guide

ComplianceLS-E-020

Landlord Annual Compliance Checklist

Annual walk-through of every compliance touchpoint: gas, electrical, EPC, smoke/CO, Right-to-Rent, deposit, licensing, database registration.

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Hand-picked by topic overlap with this guide.

England and Wales · Leasehold Management Pack (LPE1 Form — Law Society Standard July 2019): Required When Selling a Leasehold Flat · Contents: Service Charge Accounts; Major Works / Section 20 Notices; Buildings Insurance; Ground Rent; Reserve Fund; Disputes; Breach of Covenant · Timeframe: 4-10 Days (Often 4-6 Weeks — Most Common Cause of Delayed Leasehold Flat Sales) · Cost: £200-£600 · LAFRA 2024: 28-Day Maximum Response (s.35); Fee Cap; Right to Request Directly From Freeholder

Leasehold Management Pack UK 2026 — LPE1 Form, What It Contains, Timeframes, Fees, LAFRA 2024 Changes and Implications for Landlords Selling Flats

Leasehold management pack UK 2026: required when selling a leasehold flat; completed by the freeholder or managing agent on the LPE1 (Leasehold Property Enquiries) form (Law Society standard — July 2019 version). Contents: service charge accounts (2-3 years certified); current year service charge budget (itemised); planned major works and outstanding Section 20 consultation notices; buildings insurance details; ground rent (amount; review dates; LRGRA 2022 peppercorn for new leases from 30 June 2022); reserve fund balance; ongoing disputes or tribunal proceedings; breach of covenant details. Timeframe: typically 4-10 working days (poorly managed freeholders can take 4-6 weeks — one of the most common causes of delayed leasehold flat conveyancing). Cost: typically £200-£600 set by freeholder or managing agent. Leasehold and Freehold Reform Act 2024 (LAFRA 2024): 28-day maximum response time (s.35); fee cap provisions; right to request pack directly from freeholder; compensation for inaccurate information.

Leasehold Reserve Fund — LTA 1985 and LTA 1987

Leasehold Reserve Fund (Sinking Fund) — LTA 1985 s.18-22, LTA 1987 s.42 Trust Status, FTT Challenge and RICS 2019 Statement

A leasehold reserve fund (sinking fund or major works fund) holds capital contributions on trust for leaseholders (LTA 1987 s.42) to meet the cost of major periodic works — roof replacement; external redecoration; lift maintenance; communal heating. Reserve fund contributions are 'service charges' within LTA 1985 s.18 and are subject to: (1) LTA 1985 s.19 (reasonableness — only payable if reasonably incurred and of a reasonable standard); (2) LTA 1985 s.20 (major works consultation — £250/tenant threshold; Stage 1/2/3 procedure; failure limits recovery to £250/tenant without FTT dispensation under s.20ZA); (3) LTA 1985 s.21 (summary of relevant costs — within 1 month); (4) LTA 1985 s.22 (inspection of accounts — 21 days; criminal penalty £2,500 for refusal); (5) LTA 1987 s.42 (trust status — designated separate trust bank account; protected in managing agent insolvency; interest belongs to the trust); (6) FTT challenge (LTA 1985 s.27A — before or after paying; no cost risk); (7) RICS Professional Statement on Service Charges in Residential Management (2019): separate trust account; RFAR every 5 years (25-year planned maintenance schedule); accountant certification >£150,000 income; Reserve Fund Adequacy Report (RFAR) recommended by appropriately qualified surveyor.

Leasehold Law

Forfeiture of Residential Leasehold UK

CLRA 2002 s.168 requires FTT or court determination of any breach before a landlord can serve a s.146 notice on a residential long leaseholder. Ground rent arrears threshold (s.167), s.146 notice procedure, waiver of breach, relief from forfeiture, and why residential leasehold forfeiture rarely succeeds in practice.

LPA 1925 s.146 · CLRA 2002 s.168 · FTT Determination · Relief from Forfeiture · Service Charge Disputes

Section 146 Notice — Forfeiture of Residential Long Leases 2026