Published May 2026 · 6 minute read
Taking on the right to manage your development is a significant achievement. RTM companies give leaseholders genuine control over how their building is run. But with that control comes responsibility — and the risks of getting it wrong are more serious than many directors realise.
RTM company directors can face personal liability if the company fails to meet its legal obligations. The Landlord and Tenant Act 1985, the Building Safety Act 2022, the Fire Safety Act 2021 and a range of health and safety regulations impose duties on those responsible for managing a building. If a compliance failure causes injury or financial loss, directors may find themselves personally exposed — particularly if they have not taken reasonable steps to discharge those duties.
A professional managing agent does not remove that responsibility, but it provides documented evidence that proper management processes are in place — which is significant protection in the event of a dispute or regulatory investigation.
Residential blocks are subject to a substantial range of statutory compliance obligations. Fire risk assessments must be reviewed regularly. Asbestos-containing materials must be identified, recorded and managed. Water systems must be tested for Legionella. Lifts must be inspected under LOLER. Electrical installations must be tested. Emergency lighting must be checked.
These are not optional. Failing to meet them exposes the RTM company — and potentially its directors — to regulatory action, insurance issues and civil liability. In serious cases, the consequences for residents can be life-threatening. A professional managing agent maintains a compliance tracker and ensures that nothing is missed, overdue or undocumented.
Leaseholders have the right to challenge service charges that are unreasonable or not properly documented. Under the Landlord and Tenant Act 1985, service charges must be reasonable, properly consulted on (for major works over the Section 20 threshold) and supported by proper accounts. Without a professional managing agent maintaining rigorous financial records, RTM companies can find themselves facing First-tier Tribunal applications that are costly, time-consuming and disruptive.
The RICS Service Charge Residential Management Code (4th Edition, 2026) sets out the current best practice standard for service charge management. Operating in line with this code provides a strong defence against challenge and demonstrates that the RTM company is being managed properly.
Buildings insurance for a residential development is a legal requirement under most leases. Getting it wrong — underinsuring the building, failing to notify insurers of material changes, or allowing policies to lapse — can leave the RTM company exposed to significant financial liability. A professional managing agent manages the insurance renewal process, ensures the building is properly valued, and deals with claims on the company's behalf.
RTM directors are typically leaseholders who have volunteered to take on management responsibility for their building. Most have full-time jobs, families and other commitments. Managing a residential development properly is a significant undertaking — one that requires knowledge of property law, financial management, health and safety, contractor procurement and resident communication.
Without professional support, the burden falls entirely on those volunteer directors. The risks multiply when key individuals step back, fall ill or move away — and institutional knowledge disappears with them.
"A professional managing agent does not reduce the RTM company's control over its development. It gives directors the expertise and documentation they need to exercise that control properly."
Rowan Shaw Estate ManagementA professional managing agent takes on the day-to-day management burden, maintains compliance documentation, manages contractor relationships, handles service charge accounting and provides directors with the regular reporting they need to fulfil their responsibilities confidently. Critically, it provides an audit trail — evidence that the RTM company has acted properly — which is invaluable if decisions are ever challenged.
Not all managing agents are equal. The quality of management varies significantly across the sector. When appointing a managing agent, RTM directors should ask specifically about compliance tracking, financial transparency, contractor management processes and — most importantly — who will actually be managing their development day to day.
Rowan Shaw Estate Management Ltd provides director-led block and estate management for RTM companies across England and Wales.
Request a Consultation