Q: I’ve been asked to become a Director of the residents management company for my block, but I’m not sure what the implications of this are. Can you help?

A: A Residents’ Management Company (“RMC”) is a formal legal entity registered at Companies House, and has all the rights and obligations of any other UK incorporated company. As a company itself, it requires people to run it and take decisions on its behalf. These people are the directors. A private limited company only requires one person to be a director, though it is common (and prudent!) for an RMC to have several directors to share the burden of responsibility. Once you become a director of the company you will have a duty to act in the best interests of the company, and you will also carry the consequent risk of blame if things go wrong. It is therefore advisable to ensure that the RMC has the required Directors and Officers Insurance Policy to protect you. Being the director of an RMC is a responsible (and often thankless!) position, for which you are not normally allowed to receive any payment except for Board approved expenses. You should therefore give careful consideration to becoming a director, but do so in the knowledge that a well run RMC will inevitably result in a well run block and maintain the value you have invested in your apartment.