RTM Companies: Common Pitfalls and How to Avoid Them
The Right to Manage (RTM) has transformed the landscape of block and estate management in the UK. Since its introduction under the Commonhold and Leasehold Reform Act 2002, leaseholders have been able to take control of their building’s management without having to prove landlord fault. In principle, this offers empowerment and flexibility. In practice, however, many RTM companies discover that running a building involves far more complexity than expected.
This article explores the common pitfalls RTM companies face and how to avoid them. If you are already part of an RTM company or considering forming one, understanding these challenges can help ensure smoother operations, better compliance, and improved long-term outcomes for your property.
Underestimating the Legal Responsibilities
One of the first pitfalls is the assumption that taking over management is little more than handling a few service charges and maintenance calls. In reality, RTM directors step into a framework of statutory obligations, fiduciary duties, and health and safety responsibilities.
From fire risk assessments to asbestos surveys and statutory inspections, RTM companies are legally required to uphold the same standards as any managing agent or freeholder. Failure to comply exposes directors to potential liabilities, reputational damage, and even criminal proceedings.
How to Avoid It:
Seek professional guidance at the outset. Partnering with a specialist block management company, such as Plymouth Block Management, ensures legal obligations are not only met but proactively managed.
Mismanaging Service Charge Funds
RTM companies often face disputes and scrutiny over service charge collection and expenditure. Directors may lack financial systems for transparent accounting, which can lead to cash flow issues, disputes with leaseholders, and difficulties funding major works.
Poorly managed service charges also undermine confidence in the RTM company itself, leading to conflict between directors and fellow residents.
How to Avoid It:
Implement robust accounting procedures, backed by professional block management support. Clear communication, annual budgets, and transparent reporting build trust among leaseholders. Firms like Plymouth Block Management can administer service charges efficiently, ensuring compliance with the Landlord and Tenant Act 1985.
Also Read >> Fleecehold vs. Leasehold: What Plymouth Leaser Holder Should Know
Ignoring Long-Term Maintenance Planning
Another pitfall arises when RTM companies adopt a short-term, reactive approach to repairs. While urgent fixes are essential, neglecting planned maintenance results in spiralling costs, disputes, and deterioration of asset value.
For example, failing to plan for roof replacement or external redecorations can leave leaseholders with unexpected and significant bills. In some cases, neglecting cyclical maintenance breaches the lease terms themselves.
How to Avoid It:
Adopt a structured approach with a sinking fund and long-term maintenance schedule. Professional property managers bring expertise in preparing life-cycle maintenance plans, allowing costs to be spread fairly and predictably over time.
Overlooking Health and Safety Compliance
Health and safety compliance is perhaps the most overlooked area for RTM companies. Yet, it’s one of the most critical. Directors must ensure communal areas are safe and compliant with regulations, including:
- Fire risk assessments
- Emergency lighting checks
- Lift inspections
- Asbestos management
- Electrical safety testing
Failure to uphold these obligations not only risks fines but places residents’ safety at risk.
How to Avoid It:
Partner with professionals who maintain up-to-date compliance records and schedule inspections. Plymouth Block Management advises RTM companies on best practice fire safety, statutory testing, and emergency procedures, providing peace of mind that compliance is never compromised.
Struggling with Dispute Resolution
Managing a block involves people and where there are people, there are often disagreements. RTM directors may face disputes over service charge levels, noise complaints, parking issues, or even the quality of contractors’ work.
Without the right experience, these disputes escalate, damaging community cohesion and, in some cases, leading to tribunal proceedings.
How to Avoid It:
Adopt a clear governance framework, with transparent decision-making and fair dispute resolution mechanisms. An experienced managing agent can act as a neutral third party, reducing tension and ensuring issues are handled professionally.
Choosing the Wrong Contractors
RTM companies often rely on directors’ personal contacts or the lowest bidders for essential works. Unfortunately, poor contractor selection frequently leads to substandard workmanship, delays, or even legal disputes.
Since RTM companies remain responsible for outcomes, using unvetted contractors can cause significant long-term costs.
How to Avoid It:
Work with a property management firm that uses pre-approved, insured, and experienced contractors. Plymouth Block Management, for example, leverages long-standing supplier relationships to secure competitive pricing without compromising quality.
Underestimating Time and Administrative Burden
Running an RTM company requires significant time investment. Directors are expected to manage accounts, schedule meetings, liaise with contractors, respond to leaseholder queries, and ensure compliance. For many, this is a voluntary role taken on alongside full-time work or personal commitments.
The administrative burden often leads to burnout or neglect of duties, leaving buildings poorly managed.
How to Avoid It:
Recognise the value of professional support. Delegating administration, financial oversight, and compliance to an experienced managing agent allows RTM directors to focus on strategic oversight rather than day-to-day firefighting.
Overlooking Insurance Obligations
RTM companies are responsible for arranging building insurance, which requires specialist knowledge. Policies must reflect the full reinstatement value, cover common risks, and comply with lease terms. Many RTM companies inadvertently leave themselves underinsured or exposed to exclusions.
How to Avoid It:
Seek expert advice when arranging insurance. Partnering with block management specialists ensures policies are both compliant and cost-effective, with claims handled efficiently should the need arise.
To sum, RTM companies empower leaseholders to take control of their building’s management. Yet with empowerment comes responsibility. From compliance to financial management and dispute resolution, the role of an RTM director is far more complex than many anticipate.
The good news is that with the right professional support, these pitfalls can be avoided. By partnering with a specialist like Plymouth Block Management, RTM companies benefit from:
- Full legal and compliance support
- Transparent financial administration
- Long-term maintenance planning
- Professional dispute resolution
- Trusted contractor networks
If your RTM company is struggling – or if you’re planning to form one – don’t risk falling into the common traps.
Get in touch with Plymouth Block Management today to safeguard your building’s future and ensure your RTM journey delivers real value.
