Managing agent v Management company
…what is the difference between a Managing Agent and a Management Company ?
Residents Management Company is the type of company that residents in a property typically establish in order to run the building themselves. This may be enshrined in the lease or it may have come about as a result of legislation. The RMC is typically tasked with running the building, enforcing the covenants of the lease, often appointing a managing agent to act on their behalf in performing the day to day functions of running the building. The business is run for the benefit of the tenants or leaseholders and not for profit. Directors and the Company Secretary are often sourced from leaseholders in the property.
Right to Manage Company. Under the Commonhold and Leasehold Reform Act 2002, the Leaseholders of a property have the right to form their own company and take management of the building away from the Freeholder. There are certain conditions that have to be satisfied in order to achieve this. The reasons typically stated for going through the right to manage process are either to reduce service charge and / or to control the appointment of the managing agent.
A Managing Agent performs most of the daily duties of running a property under the appointment, direction and control of the nominating party, whether that is the Freeholder, RMC, RTM or developer. Often the appointment of a Managing Agent is covered under the terms of the Lease. A Managing Agent takes many of the pressures of running the building away from the Freeholder and / or Directors of the Company, allowing them to enjoy their home or investment.