Block Management & RTM Companies: What Are The Legal Duties?

As a director of a block management or right to manage company, there are a number of legal duties that must be upheld. To ensure smooth day-to-day management of your RTM company and in turn the block of flats itself, below is a list of responsibilities to consider. These will help you to successfully fulfil your role and adhere to company law.

The legal obligations of a right to manage company director

  • A duty to exercise their powers for their proper purpose

Check that you are always acting within your powers. This includes any limitations as to what a director can or cannot do within your right to manage company.

  • A duty to promote the success of the company

Promoting the success of a right to manage company is a key duty of the director. You should ensure that any decisions made have taken into account any potential long term consequences on the company’s reputation.

  • A duty to exercise independent judgment

To prevent bias or decisions influenced by personal opinion, company directors must make decisions and come to conclusions on their own. It is vital that other parties do not influence any decision-making undertaken by the company director.

  • A duty to exercise reasonable care, skill and diligence

As well as preventing bias and influence from others when making decisions, being a director of a right to manage company also involves a duty of care and a certain level of skill. To ensure the correct and most fair decision is made, if in doubt a director should seek specialist advice.

  • A duty to avoid conflict of interests

Another important element of block management is avoiding any potential conflicts of interest. For example, if a tenant is in need of a contractor such as a plumber or window cleaner, a director cannot recommend a contractor or business owned by their friends or family.

  • A duty not to accept a benefit from a third party

As a company director, accepting a benefit from a third party is forbidden. This is due to the potential risk of this causing a conflict of interest.

  • A duty to declare an interest in a proposed transaction or arrangement with the company

Directors must declare both the nature and extent of their interest to the other directors.

Other day-to-day responsibilities

As well as legal duties, company directors also have a range of other key duties and responsibilities to maintain which include:

  • Attending Health & Safety inspections
  • Ensuring adequate block of flats insurance cover is in place
  • Investigating lease enquiries and complaints
  • Contractors, staff, and supplier payments
  • Arranging block of flats insurance
  • Writing 5-10 year block management and maintenance plans

For more right to manage guidance, get in touch with our friendly team at Flats Direct. We offer high quality block of flats insurance to provide you with full peace of mind. To discuss your block of flats insurance cover, give us a call on 0800 731 6242 or email info@flatsdirect-uk.com.