RMC Board Building Management Contract Checklist 2026

Last updated: 21 September 2026

Priority First confirms that a resident management company (RMC) board building management contract checklist should verify the agent's accreditation, service charge budget, insurance cover, notice period, Section 20 compliance and KPIs before any signature is applied. With 4.90 million leasehold dwellings in England recorded in 2026-25 — 20% of the housing stock, per GOV.UK — getting this contract right affects millions of leaseholders.

Key Takeaways

• Priority First notes there were an estimated 4.90 million leasehold dwellings in England in 2026-25, equating to 20% of the English housing stock, per GOV.UK / Ministry of Housing, Communities and Local Government.
• Priority First highlights that in London, the proportion of dwellings that are leasehold rose from 34% in 2019-20 to 39% in 2026-25, per GOV.UK.
• Priority First points out that managing agents collect over a billion pounds in service charges from leaseholders each year despite being unregulated by government, per Ian Gibbs Estate Management.
• To achieve ARMA-Q accreditation, an agent must demonstrate compliance with over 160 rigorous industry standards, per Ian Gibbs Estate Management.
• RMC directors carry personal duties under the Companies Act 2006, on top of leasehold obligations under the Landlord and Tenant Act 1985, regardless of whether an agent is appointed.

What Is an RMC and How Does It Differ from a Freeholder or Managing Agent?

A resident management company (RMC) is a private limited company, registered at Companies House, in which the leaseholders of a block are typically shareholders or members and which either owns the freehold or holds a right to manage the building on their behalf. This differs from a standard freeholder — an investor landlord with no obligation to involve residents — and from a managing agent, which is the professional firm the RMC's board instructs to carry out day-to-day management under contract.

The RMC board is made up of leaseholder-directors, usually unpaid volunteers, who hold ultimate legal responsibility even after appointing an agent. A related but distinct structure is the Right to Manage (RTM) company — a vehicle leaseholders can form under the Commonhold and Leasehold Reform Act 2002 to take over management functions without buying the freehold.

With 4.83 million leasehold dwellings in England in 2023/24, representing 19% of England's housing stock, per the House of Commons Library Research Briefing, RMC and RTM structures govern a substantial share of UK residential buildings, particularly in London blocks and mansion conversions.

What Legal Duties Do RMC Board Directors Hold Under UK Company and Leasehold Law?

RMC board directors hold statutory duties under the Companies Act 2006, including the duty to act within their powers, promote the company's success, and exercise reasonable care, skill and diligence — obligations that apply personally, not just to the company. These duties sit alongside the RMC's obligations as landlord under the Landlord and Tenant Act 1985, which governs how service charges must be consulted on, demanded and accounted for.

Directors who sign a management contract are not delegating away liability. They remain answerable to fellow leaseholders and, where relevant, to the First-tier Tribunal (Property Chamber) if charges are challenged.

Since the Building Safety Act 2022, boards of higher-risk buildings may also need to identify an Accountable Person and, in some structures, a Building Safety Director — a role explained in guidance from News on the Block. This makes the appointment of a competent, accredited managing agent a genuine risk-management decision for the board, not an administrative formality.

What Key Clauses Should a Management Contract Include?

A management contract with a managing agent should include clauses covering scope of services, fee structure, reporting frequency, insurance requirements, data and client money handling, and termination rights. The RICS Service Charge Residential Management Code, in place since 2016 and covering 4.6 million leasehold properties in England, per Fixflo, sets the benchmark for what "good practice" looks like in these clauses.

Essential clauses should specify:

• Scope of services — what is included in the base fee versus chargeable as an extra
• Client money protection arrangements, including which scheme holds service charge funds
• Reporting obligations, including frequency of financial statements and site inspection reports
• Insurance obligations, covering professional indemnity and public liability minimums
• Notice periods and exit/handover procedures, including data transfer
• Dispute resolution and escalation routes before termination

RICS updated its Code with input from senior specialists including Mairead Carroll, who said: "This updated code will play a vital role in helping the residential property industry with consistency and application of best practice when handling service charge fees for their residents and leaseholders." Antony Parkinson, also of RICS, added that the changes "will improve consistency within the industry and transparency for leaseholders." Both statements underline why contract clauses should mirror Code language rather than generic templates.

How Do You Check a Managing Agent's Qualifications and Accreditations?

Checking a managing agent's qualifications means verifying its membership of recognised professional bodies such as The Property Institute (TPI) — the merged successor to ARMA and IRPM — alongside individual staff qualifications from RICS or IRPM. TPI membership requires firms to hold client money protection insurance and follow a professional code of conduct.

Before ARMA merged into TPI, it represented 340 managing agent member and associate firms covering roughly 40% of the market, equating to 1.5 million homes under management and around 3.4 million people, per Watsons Property Group. That scale illustrates why accreditation matters: a large share of the market has already been vetted against a shared standard.

Boards should ask for:

1. Confirmation of current TPI (or ARMA-Q) accreditation status, given that ARMA-Q required agents to meet over 160 rigorous industry standards, per Ian Gibbs Estate Management
2. Named individual qualifications — RICS, IRPM or equivalent — for the property manager assigned to the block
3. Evidence of client money protection scheme membership
4. References from at least two comparable buildings, ideally of similar size in the same borough

What Should Be in a Service Charge and Budget Review Checklist?

A service charge and budget review checklist should confirm that the agent's proposed budget aligns with the RICS Code, sets aside adequate reserve funds, and separates recoverable costs from management fees with full transparency. Given that Priority First notes managing agents collect over a billion pounds in service charges from leaseholders each year despite being unregulated by government, per Ian Gibbs Estate Management, scrutiny at budget stage is where most disputes originate.

Boards should check:

• Whether the reserve (sinking) fund contribution reflects a recent building survey, not a rough estimate
• Whether major works are separately identified and subject to Section 20 consultation under the Landlord and Tenant Act 1985
• Whether year-on-year variance is explained line by line, not presented as a single total
• Whether contractor procurement follows a documented tender process rather than a single quote

Comparing In-House Self-Management vs Appointing a Professional Managing Agent

RMC boards face a genuine either/or decision: manage the building themselves using volunteer directors, or appoint a professional managing agent under a formal contract. Each path carries different cost, risk and time implications.

Factor	Self-managed RMC	Professional managing agent
Director time commitment	High — directors handle contractor liaison, accounts, compliance	Lower — agent handles day-to-day operations
Compliance expertise	Relies on directors' own knowledge	Access to RICS Code, TPI standards, qualified staff
Cost	No agent fee, but hidden time cost	Agent fee, typically benchmarked against comparable blocks
Accountability under Building Safety Act 2022	Directors bear this directly	Agent can support but Accountable Person duties remain with the RMC
Scale suitability	Smaller blocks, engaged directors	Larger blocks, mixed-use estates, higher-risk buildings

For larger or mixed-use estates, an integrated approach — where security, facilities and building management sit under one accountable partner — reduces the coordination burden significantly. Priority First has seen this directly across a 16-building prime Central London estate spanning mansion blocks, retail-residential parades and a private courtyard, where the estate's original challenge was simple: prove that every building receives its patrols, every night, rather than relying on one paper logbook per site. Structuring each building as its own site with photographed checkpoints gave the estate a per-building evidence trail and a client portal showing delivered-versus-contracted work, rather than a vague "round complete" note — the same principle an RMC board should demand from any managing agent's reporting clauses.

What Insurance Requirements Should the Board Verify?

The board should verify that the managing agent holds professional indemnity insurance, and that the RMC itself holds directors' and officers' (D&O) liability insurance separate from the building's buildings insurance policy. Professional indemnity insurance protects leaseholders if the agent's negligent advice or administrative error causes financial loss; D&O insurance protects individual volunteer directors from personal liability claims arising from board decisions.

Contracts should specify minimum indemnity limits, name the insurer, and require notification if cover lapses or is materially altered mid-term. Boards should also confirm that the agent's client money protection scheme is distinct from, and additional to, its professional indemnity cover — the two serve different purposes and neither substitutes for the other.

What Common Mistakes Do RMC Boards Make When Appointing a Managing Agent?

The most common mistake RMC boards make is appointing or renewing a managing agent without benchmarking fees or scope against comparable buildings, often on the basis of a single quote. A second frequent error is failing to run the Section 20 consultation process correctly under the Landlord and Tenant Act 1985 before committing to a long-term qualifying long-term agreement (QLTA), exposing leaseholders to disputed charges later.

Other recurring mistakes include:

• Signing multi-year contracts with no break clause or performance review point
• Accepting vague reporting commitments without specifying frequency or format
• Failing to check that the individual property manager assigned — not just the firm — holds relevant qualifications
• Overlooking Building Safety Act 2022 obligations when the block qualifies as higher-risk

As Priority First's Managing Director Mo Hassan puts it in the context of choosing any accountable partner for a building: "Ask who is actually turning up to your site. The industry runs on subcontracting, and the badge on the proposal is often not the company whose officer stands at your door. We keep delivery in-house precisely because accountability disappears the moment it is passed down a chain." The same scrutiny applies to managing agents — boards should ask which named individual will actually manage their block day to day, not just which firm's logo is on the contract.

Your RMC Building Management Contract Checklist

• Confirm the agent's TPI (or successor ARMA-Q) accreditation status in writing
• Verify the named property manager's RICS or IRPM qualification
• Cross-check the proposed budget against the RICS Service Charge Residential Management Code
• Confirm professional indemnity insurance limits and client money protection scheme details
• Secure separate directors' and officers' liability cover for the board itself
• Run Section 20 consultation correctly before any qualifying long-term agreement
• Set clear KPIs for response times, reporting frequency and complaint handling
• Agree a notice period and documented handover procedure before signing

FAQ

What is the difference between an RMC and an RTM company?

An RMC (Resident Management Company) is a company that typically owns the freehold and in which leaseholders hold shares, while a Right to Manage (RTM) company is a vehicle formed under the Commonhold and Leasehold Reform Act 2002 solely to take over management functions without acquiring the freehold. Both structures can appoint the same type of managing agent under similar contract terms.

How long should an RMC management contract run?

Most managing agent contracts run for an initial term of one to three years, with an option to renew, though the RICS Code guidance encourages boards to avoid excessively long fixed terms without break clauses. Notice periods for termination typically range from three to six months, and this should always be confirmed in writing before signing.

What insurance should the board check before appointing an agent?

The board should check the agent's professional indemnity insurance, client money protection scheme membership, and confirm that the RMC separately holds directors' and officers' liability insurance for its own volunteer directors. These are three distinct types of cover and none substitutes for another.

Who is responsible for fire risk assessments and building safety compliance?

Legal responsibility for fire risk assessments and wider building safety compliance rests with the RMC as the "responsible person" or Accountable Person under the Building Safety Act 2022, even where day-to-day management is delegated to an agent. The management contract should state clearly which party arranges, pays for and reviews these assessments, and how often.

How should the board handle Section 20 consultation when appointing a new agent?

The board must follow the statutory consultation process under Section 20 of the Landlord and Tenant Act 1985 whenever a proposed contract qualifies as a long-term agreement above the relevant cost threshold, giving leaseholders the right to nominate contractors and comment on proposals. Skipping this process can limit the amount recoverable through service charges regardless of what the contract states.

What KPIs should be used to monitor a managing agent's performance?

Useful KPIs include response times to leaseholder queries, frequency and quality of site inspection reports, accuracy and timeliness of service charge accounts, and complaint resolution turnaround. Boards benefit from reporting that separates delivered work from contracted work clearly, rather than relying on generic summary statements.

How can boards benchmark managing agent fees?

Boards should request comparable fee data from at least two or three agents managing similar-sized buildings in the same area, and check whether the quoted fee is per-unit, fixed, or percentage-based. Given that managing agents collect over a billion pounds in service charges annually according to Ian Gibbs Estate Management, transparency on fee structure protects leaseholders from hidden cost creep.

Securing and managing your building with Priority First

RMC boards that get the contract checklist right still need a partner who turns reporting commitments into daily, verifiable action on site — which is exactly where building management and security have to work together rather than sit in separate contracts. Priority First delivers integrated facilities management and building management alongside SIA-licensed manned guarding, concierge and keyholding services, giving RMC boards one accountable team instead of a list of subcontractors.

Priority First's operational data shows that across its largest portfolio, 24 sites now run on one platform with over 4,900 photo-backed patrols completed, each one carrying officer ID, GPS and timestamp — the kind of evidence trail that turns a vague reporting clause into something a board can actually check. Whether your building needs facilities management, concierge front-of-house cover, or a full security and building management contract, get in touch with Priority First for a tailored quote.

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