A Right to Manage (RTM) director must fulfil the very important task of taking care of the residential property on behalf of the leaseholders. This is a major responsibility, which contains a lot of essential knowledge involving matters such as legal, financial and operational commitments.

RTM companies come under the enactment provided by the Commonhold and Leasehold Reform Act 2002; this allows leaseholders to take charge over management from the freeholder in question. Directors of these companies thereafter have the burden of responsibility to ensure that the property is managed smoothly, legally and efficiently.

RTM Directors Legal and Governance Responsibilities

The director of an RTM is bound by the Companies Act 2006, which is the law governing company directors in the United Kingdom. The significant legal obligations of directors include:

1. Acting in Good Faith: Directors must prioritise the interests of the RTM company and its leaseholder members, making decisions that benefit the property as a whole.
2. Adhering to Lease Agreements: Directors must ensure that the terms of the property’s lease agreements are followed. This includes maintaining communal areas, ensuring repairs are completed, and managing the property in line with leaseholder rights and obligations.
3. No Conflict of Interest: The directors will disclose their personal interests that conflict with their duties and then avoid decisions where such a conflict may arise.

Financial Management

An RTM director is responsible for the financial health of the RTM. This ranges from preparing and managing budgets, collecting service charges, to ensuring funds are appropriated for property maintenance and improvements. Directors must also:

• Maintain transparent financial records.
• Comply with any tax obligations, such as paying corporation tax where required.
• Control reserves for longer-term and unexpected repairs.
• Failure to deal with these areas of finance properly may lead to conflict between leaseholders and potential legal issues.

Maintenance and Repairs

One of the most principal responsibilities of an RTM director includes facilitating the maintenance and repair of the property. This encompasses contracting with service providers, maintaining common areas, and dealing with current repairs. In this way, directors will also be obligated to ensure adherence to health and safety legislation, which may encompass periodic fire risk assessments among other potential hazards.

Communication and Stakeholder Consultation

Directors should communicate effectively with leaseholders, freeholders (where relevant), and contractors. Regular communication allows transparency and builds trust in the management company among the different stakeholders.

Some responsibilities include:

• Organising and chairing Annual General Meetings (AGMs) and any other necessary meetings.
• Consulting leaseholders on major decisions, for example, major works or changes to service providers
• Making sure one handles disputes or complaints in a fair, professional and timely manner. 

Risk Management and Insurance

Such companies are obliged to have adequate insurance covering the property, including but not limited to buildings insurance and liability insurance. It is the duty of the directors to review risks and ensure that policies are current and adequate. If the proper insurance is not maintained, it may have disastrous consequences for the property and its residents.

Delegation and Professional Support

While there is a broad responsibility for directors, it is not expected that they should carry out all tasks personally. Directors may delegate specific duties to property managers, accountants, or solicitors and are still responsible as overseers. Using professional support can ensure that obligations with regard to legal and technical matters are met.

In summary, the role of an RTM director can be very multi-faceted and calls for a combination of legal knowledge, financial literacy, and organisational skills. By carrying out their duties well, the directors ensure that the property functions well and is maintained; this protects the interests of all leaseholders. Though demanding, the job also offers an opportunity to construct a better-managed, more harmonious living environment for all concerned.