Setting up a Resident Management Company (RMC) on a freehold estate

If you live on a privately managed freehold estate and you're tired of paying an opaque charge to a managing agent nobody chose, the obvious answer is: take over. Set up a resident management company, hire your own contractors, run the estate yourselves. It's a good instinct — but the path is not the same as the leasehold "Right to Manage" you may have read about, and getting the order of operations wrong can waste a year of evenings.

This guide explains, in plain English, when residents on a freehold estate can actually form and use an RMC, how to incorporate one properly, what your director duties will be, and how to run the AGM and accounts without tripping over Companies House. It is informational only — not legal advice.

TL;DR

Freehold estate residents do not have a statutory Right to Manage. The Right to Manage (RTM) under the Commonhold and Leasehold Reform Act 2002 covers qualifying leasehold blocks, not freehold houses on estates. For freeholders, whether you can take over management depends on what your deeds, transfer documents (TP1s) and the estate's existing company structure allow. Setting up the RMC itself is the easy bit: it's a private company limited by guarantee, incorporated at Companies House for £50 online (gov.uk). The harder bit — and the one most guides skip — is whether that company will actually control anything once it exists. Read your transfer plan before you incorporate.

What is a resident management company, exactly?

A resident management company (RMC) is a private limited company set up by the homeowners on a development to manage shared areas — roads, drainage, lighting, open space, play areas — that the local council has not adopted. The homeowners are the members of the company; a small group of them serve as directors; and the company either does the work itself or hires a managing agent to do it on its behalf.

The government's own guidance describes an RMC as a limited company "so residents can jointly run a property" (gov.uk: set up a flat management company). The same legal vehicle is used on freehold estates, even though that page was written with blocks of flats in mind. Almost all of these companies are incorporated as private companies limited by guarantee without share capital — the same structure used by the freehold RMCs you can look up yourself on the Companies House register.

Can freehold estate residents legally take over management?

This is the question that decides whether the rest of the work is worth doing, so do it first.

Leaseholders in qualifying buildings have a statutory route: the Right to Manage, introduced by the Commonhold and Leasehold Reform Act 2002, lets them force a transfer of management functions to an RTM company without needing the freeholder's consent. No equivalent statutory right exists for homeowners on freehold estates. The Leasehold Advisory Service confirms RTM is a leaseholder mechanism (lease-advice.org), and the government's December 2025 consultation explicitly looks at whether to introduce a route to "mandate resident-controlled management" on freehold estates — i.e. it doesn't exist yet (gov.uk consultation).

In practice, freehold residents who want control have to work out which of three situations they're in:

Your situation	What an RMC can do for you
The estate's existing management company is already an RMC (residents are members, directors elected by residents)	You don't need to set up a new one — you need to engage with the existing one, stand for election, and use its powers to replace the managing agent.
A developer-owned or third-party management company controls the estate under the transfer documents	A new RMC has no power unless the existing company hands management over (rare) or the deeds let residents take control at a defined trigger (e.g. once X% of plots are sold). Check your TP1.
The transfer obliges each homeowner to pay a rentcharge to a named company, and that company is willing to step away	You may be able to set up an RMC, take a novation/assignment of the management function, and replace the existing arrangement — usually with the developer or rentcharge owner's cooperation and a conveyancing solicitor.

The legal vehicle is the easy part. The real question on a freehold estate is whether your deeds give the new company anything to manage.

In practice, on most newer estates the management function is locked into a developer-controlled company by the transfer documents. The right to form an RMC, sack the managing agent and hire a local contractor for a fraction of the price often already exists — but only because residents have inherited an existing RMC and don't realise it. The blocker is rarely the law; it's that nobody is willing to read the deeds and run the meetings.

What are the steps to incorporate an RMC at Companies House?

Assuming you've checked the deeds and a resident-controlled company is the right vehicle, the incorporation itself is straightforward. The government's standard process for setting up a private limited company applies (gov.uk: set up a flat management company).

1. Agree the structure. Almost all RMCs are private companies limited by guarantee without share capital. Each member gives a guarantee — usually £1 — instead of buying a share. Membership transfers with the property when a home is sold.
2. Choose a name. It must be unique on the Companies House index and is normally something like "[Estate Name] Residents Management Company Limited."
3. Draft articles of association. You can use the standard model articles for companies limited by guarantee, but most RMCs need bespoke articles — for example, to tie membership to ownership of a plot and to require automatic transfer of membership on sale. A conveyancing or property solicitor should review these before you file.
4. Appoint initial directors. You need at least one natural-person director aged 16+. In practice, three to seven residents is a workable board — enough to share the load and form a quorum, few enough to make decisions.
5. Register at Companies House using form IN01 online for £50, or by post for £71 (fees per gov.uk). You'll need a registered office address (often a director's home, or a solicitor's address).
6. Open a bank account in the company's name. This is often the slowest step — allow several weeks.
7. Tell HMRC the company exists and register for corporation tax. HMRC may write to say the company is dormant if it does nothing more than manage property in members' interests, in which case you won't need to file Company Tax Returns going forward (gov.uk).

Incorporating costs less than a takeaway dinner for the board. The articles of association are what genuinely need professional review — get them wrong and you'll be amending them for years.

What are the legal duties of an RMC director?

Once a homeowner is a director, they are a director of a company in exactly the same way that a director of a high-street retailer is. The Companies House guidance for residents' management company directors makes this point plainly (Companies House blog).

The seven statutory duties under the Companies Act 2006 (sections 171–177) apply in full (legislation.gov.uk):

• act within powers given by the articles
• promote the success of the company for the benefit of its members as a whole
• exercise independent judgment
• exercise reasonable care, skill and diligence
• avoid conflicts of interest
• not accept benefits from third parties
• declare any personal interest in proposed transactions

For an RMC director, the practical translation is: you cannot vote yourself a discount on your own estate charge, you cannot quietly award the gardening contract to your brother-in-law, and you cannot let the company drift into insolvency by failing to collect charges. You also share collective responsibility under the model articles for day-to-day decisions of the company (Companies House blog).

Directors and Persons of Significant Control are publicly named on the Companies House register. Most estates carry directors' & officers' (D&O) insurance — typically a few hundred pounds a year — to cover personal liability if a decision is later challenged.

How do AGMs and annual filings work for an RMC?

A private company is not legally required by the Companies Act 2006 to hold an annual general meeting unless its articles say so. In practice, most RMC articles do require an AGM — read yours before assuming you can skip it.

What you do have to do every year, without exception:

• File an annual confirmation statement at Companies House (£34 online).
• File annual accounts — most RMCs qualify for small-company or micro-entity exemptions, so these are short.
• Circulate the accounts to members (your homeowners).
• If your articles require an AGM, hold one — usually with at least 14 clear days' notice, but check the articles.

A workable AGM for an RMC of, say, 120 homes runs about 90 minutes: chair's report, accounts, re-election of directors, vote on the year's budget and managing-agent contract, and a Q&A. Hold it in person at a local hall or hybrid via video. The meeting minutes go in the company's records.

A worked example: from kitchen-table grumble to working RMC

Say you live on a 120-home estate built in 2018. The annual estate charge is £420. The bill shows £6,000 for grounds maintenance, £1,000 of unspecified "management expenses," and a 25% management fee on top of the base costs. Residents are furious, but the WhatsApp group hasn't produced any action.

In practice, the fastest way to expose whether the grounds-maintenance charge is fair is to divide it by the months work is genuinely done — mowing only happens roughly April to October, so that £6,000 is closer to £1,000 a month of actual work, not £500. Then you check whether the management contract is held by a resident-controlled company already (look it up on Companies House — search the company named on your invoice). If it is, the rest is mechanics:

1. Five residents stand for election as directors at the next AGM.
2. Once elected, the board gives contractual notice to the existing managing agent (typically 3 months under standard contracts).
3. They tender the work to two or three local contractors and pick one at a market rate.
4. The 25% "management fee" and the £1,000 of vague "management expenses" simply disappear from next year's budget because the new contractor is paid directly.

None of that requires new legislation. It requires people to give up some weekends.

What if a developer-owned company still controls the estate?

This is where most freehold estates get stuck. If the management function is locked into a company owned by the developer or a third party — and your transfer plan obliges you to pay a rentcharge to that company — incorporating a new RMC doesn't, on its own, give residents any power. The new company is just five neighbours and a bank account; it has no contract with anyone.

Three realistic options:

• Wait for the trigger in the transfer. Some developer-led arrangements include a clause transferring the management company's shares to residents once a defined proportion of plots are sold. Read your TP1.
• Negotiate a handover. Developers occasionally agree to novate the management function to a resident-controlled company. This usually needs a solicitor.
• Use the new statutory routes when they commence. Part 5 of the Leasehold and Freehold Reform Act 2024 will, when its secondary legislation is in force, allow homeowners on freehold estates to apply to the First-tier Tribunal to appoint a manager in cases of serious management failure (gov.uk consultation). As of 26/06/2026, those provisions are still being consulted on and are not yet in force — re-verify before relying on them.

Frequently asked questions

Do freehold homeowners have a statutory Right to Manage like leaseholders?

No. The statutory Right to Manage under the Commonhold and Leasehold Reform Act 2002 applies to qualifying leasehold buildings, not freehold estates. Freehold residents wanting to take over management generally have to rely on contractual routes in their deeds, transfer documents, or by buying out / replacing the existing estate management company.

What kind of company should a residents' group set up?

Most RMCs are incorporated at Companies House as a private company limited by guarantee without share capital. Each member's liability is typically limited to £1, and membership usually transfers automatically when a property is sold. Always check what the estate's existing deeds and transfer documents require before incorporating.

How many directors does an RMC need?

A private limited company needs at least one director who is a natural person aged 16 or over. In practice, most resident-run RMCs appoint three to seven directors so the workload (and risk of burnout) is shared. Directors owe statutory duties under sections 171–177 of the Companies Act 2006.

Does an RMC have to hold an AGM?

Private companies are not required by the Companies Act 2006 to hold an annual general meeting unless their articles of association require one. Many RMC articles do require an AGM — check your articles before assuming you can skip it. Either way, members must receive annual accounts and a confirmation statement must be filed each year at Companies House.

Can a freehold estate RMC sack the managing agent?

Yes, if the RMC genuinely controls the management contract. If a resident-controlled company already holds the management function under the estate's transfer documents, its directors can give contractual notice to the managing agent and appoint a new one. If a developer-owned company still controls management, residents normally cannot replace the agent without first taking over that company.

Where next

If you're working through whether to take control of your estate, our companion guides on how to take control of your estate via an RMC or change managing agent, how to complain about a managing agent, and reading estate management company accounts cover the practical next steps in more detail. For a fact-specific question about your deeds or transfer plan, contact the Leasehold Advisory Service or a conveyancing solicitor.

Last reviewed: 26/06/2026.

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