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Right to manage companies (RTM)

RTM companies

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I have been approached by a newly formed Right to Manage (RTM) company. These are set up where the leaseholders effectively take over the management of the building, often from the freeholder. They then often appoint a third party agent to look after day to day collection of service charges, paying bills and so on. Getting the figures together is fine, but the it is the format of the accounts I am bit unsure about. Is it the actual RTM company registered at Companies House that has the figures or just some other "non-entity" that draws up some service charge accounts along the same lines as is often done when a RTM does not exist (and indeed what was done here before the RTM came about). I have seen a lot of RTM companies at Companies House that are reporting a totally dormant position with no assets or liabilities. Can anyone advise please if they have experience in this area. Thanks. 

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By Ben Adams
05th Jul 2022 15:40

Hi, I'm not an expert at this but in a personal capacity for my building, I filed accounts for a RTM company.

There are two things that I considered. The statutory accounts and effectively the Management accounts.

Based on not being able to find any exemptions, I preapred the statutory accounts with to FRS 105. My RTM companies was not profit seeking. Specifically it various expenses through the year e.g. building insurance and then charge the leaseholders an amount equal to the expenses. As such the total Profit for the year was nil and since we didn't have a company bank account, the only thing on the balance sheet was £1 share capital and £1 asset.

I suspect some people would class this as dormant, as it looks like nothing is happeing.

I also produced management accounts, showing the spend of the company and the share for each flat.

Thanks (1)
avatar
By Ben Adams
05th Jul 2022 15:40

Hi, I'm not an expert at this but in a personal capacity for my building, I filed accounts for a RTM company.

There are two things that I considered. The statutory accounts and effectively the Management accounts.

Based on not being able to find any exemptions, I preapred the statutory accounts with to FRS 105. My RTM companies was not profit seeking. Specifically it various expenses through the year e.g. building insurance and then charge the leaseholders an amount equal to the expenses. As such the total Profit for the year was nil and since we didn't have a company bank account, the only thing on the balance sheet was £1 share capital and £1 asset.

I suspect some people would class this as dormant, as it looks like nothing is happeing.

I also produced management accounts, showing the spend of the company and the share for each flat.

Thanks (0)
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By David Ex
05th Jul 2022 15:46

andrew1211 wrote:

Can anyone advise please if they have experience in this area. 

If you’re not already doing these, I’d be avoiding. Can’t believe the fees are that great and no obvious cross-selling opportunities. Add your learning curve costs and it just doesn’t look worth the effort.

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By Paul Crowley
05th Jul 2022 21:06

Used to do a lot of these (over 100)
The property agent usually has their chosen accountant
If it is the owners dealing with it, then avoid. You will lose so much time, and unless one of them runs a company they will be 'shocked' at the fee.

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Replying to Paul Crowley:
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By David Ex
05th Jul 2022 22:30

Paul Crowley wrote:

The property agent usually has their chosen accountant

That’s true. I thought that same and, as you say, if the owners are doing it themselves, that could be a nightmare.

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