The next few years are set to see major changes in the residential sector for England and Wales. The Government is pressing ahead with high-profile reform of the building safety regime, while a series of reports from the Law Commission earlier this year herald changes to the leasehold system. Together, these two programmes will rightly bring new opportunities for residents to get involved in how their buildings are run, but also new responsibilities.
As the UK’s largest residential property manager, residents regularly tell us that they want control and visibility over decisions that are made about their building – from how funds are raised to cover essential works, to agreeing standards for the care of communal areas. We’re hopeful that the Government’s reform programme will help achieve this.
The changing role of an RMC
As reform of the system moves forward, it’s important that everyone involved in building management understands how roles are set to change. This is particularly true at developments where resident management companies (RMCs) are established. RMCs are an alternative to the traditional model where a freeholder is the party responsible for management of communal areas and shared services. When an RMC is set up, it is residents who get to make decisions about these things, and also take on the responsibilities and obligations that would usually sit with a freeholder.
The RMC model can give residents more involvement in decisions about their home environments, and it works well at lots of developments across the country. However, this comes with a degree of complexity and there are legal issues to consider too. The RMC set-up transfers many duties directly to resident directors, who bear all of the normal liabilities of company directorship – in this case that includes things like arranging building insurance, service charge collection and, crucially, responsibility for fire and building safety. These responsibilities cannot be delegated, so RMC directors are therefore ultimately liable for decisions they take.
RMCs therefore often appoint professional property managers to carry out maintenance and management functions on its behalf. Employing a responsible, professional operator helps to take technical and time-consuming jobs away from residents.
Professional Property Manager’s input
Our own work with over 570 RMCs gives us an insight into the pressures the role can involve. A recent survey of the RMC directors we work with found that a third are concerned to some extent about their roles and responsibilities being changed by new building safety regulations – which will bring more regular compliance checks and higher standards. So, it’s vital that RMC directors think about what they’ll need from their property manager in the future, and pick one that has the required capability and expertise to help.
For RMC directors, it is essential to ensure that responsibilities for building management are carried out professionally. This needs a well-planned and considered approach. For example, agreeing the standards and costs for the site, and making sure accounts and budgets are properly prepared and audited – this will give confidence to your neighbours that the development is being properly and professionally run. Setting up digital systems are also increasingly part of effective property management, especially for RMC directors who are often short of time between other personal and professional commitments.
A resident-focused solution
More resident involvement in developments is undoubtedly positive, and we’re pleased to see that government reform is trying to make it easier for residents to become more involved with decisions about their development. As the number of RMCs continues to increase and as regulations become tighter, it’s important that the right steps are put in place to help residents navigate the system and make it work for them.
Nigel Howell, Chief Executive of FirstPort, the UK’s leading residential property manager
Want to know more?
We understand the pressures and complexities that property management creates for a Residents’ Management Company – we’re here to help you. With over 40 years’ experience, we work with RMC Directors to help them meet their management and legal obligations, whilst delivering a high quality service for their leaseholders.
To find out more, call us on 01582 393 756 or visit www.firstport.co.uk/rmc