RTM company management structure

General & Sheep troops

The RTMC is formed before any steps are taken to exercise RTM.

The company is run by its registered members who must be qualifying tenants of a flat (i.e. a leaseholder). The landlord can become a member after acquisition.

Members elect a Board of Directors by Ordinary Resolution (Art. 22), or the Directors may appoint another director (subject to the willing candidate being a member of the company). It follows that the landlord cannot become a Director unless voted so.

The Board of Directors and not individual Members exercise all the powers of the company.

This point is possibly a lost cause to argue with leaseholders. They may balk at the very notion of volunteering to run the company, but show them a contractor on site and they will be out in a flash telling them “We manage ourselves you know“, insisting things are done as they demand. No discussion with the directors, naturally. Luckily the average contractor is well used to this nonsense and knows if they act under such instructions there is nobody to pay them for the ad hoc work. Doesn’t stop the demands. Five years on and we still experience this behavour.

Membership of the company does not confer any right to dispute the authority of the RTMC’s appointed managing agent who receives his delegated authority directly and only from the RTMC as passed down by decisions of the Board.

Beware managing agents who will try to run the company!

Members of the company (and other non-member lessees) continue to interact with the agent in respect of their own lease and covenants as before RTM.

First General Meeting

There is an unavoidable wait after the counter notice is received from the landlord and the acquisition date. This is the critical time to get organised. Hold a formal company meeting of Members to get everybody on the right path as regards, appointing agents, agreeing the budget etc.

Circulate an agenda for the General Meeting giving valid notice per the Model Articles with a time and a venue. Ideally the directors should circulate numbered resolutions with proxy voting rights (and should do this for AGMs) , but for the first meeting the proxy forms may have to be ‘blind’. They must be provided per the Companies Act. The company should start as it needs to continue – business-like and efficient. The first items of business needed are:-

  • Decide the managing agent

  • Appoint directors if more than first two seem necessary.

  • Confirm financial position of the company.

  • Agree the service charge budget for remainder of financial year ready to issue pro rated invoices due at the acquisition date.

The first decision has already been taken in principle –  whether the RTMC will appoint a managing agent – as this had to be indicated in the prescribed Notice Inviting Participation.

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