How to appoint — or replace — a managing agent after RTM

Winning right to manage gives your RTM company the freedom to appoint any managing agent you like — or no agent at all. That freedom is real, but the decision deserves more than a quick vote at the first directors' meeting. Get it right from the start and your building almost runs itself. Get it wrong and you risk trading one difficult agent for another.

What does a managing agent actually do for an RTM company?

A managing agent carries out the day-to-day administration your RTM company is legally responsible for. That means collecting service charges, paying contractors, arranging buildings insurance, keeping accounts, managing maintenance calls, and ensuring compliance with your lease obligations and health-and-safety law. They act on your instructions — the RTM company remains the decision-maker — but they do the legwork.

What a managing agent does not do is take over your responsibilities as a director. You still approve budgets, sign off major works, and make the calls that affect your fellow leaseholders' money. The agent executes; the RTM company governs. Keeping that distinction clear will save you a great deal of confusion later on.

Self-manage or appoint an agent — how to decide

Some RTM companies choose to manage their building themselves, particularly in smaller blocks where the directors have the time, skills and appetite for it. Self-management can cut costs and keeps every decision close to home. But it is also a genuine commitment: service charge accounting, Section 20 consultation, insurance renewal, contractor management and compliance tracking all fall to the directors personally. If the volunteers who formed the RTM company are already stretched, self-management can quickly become the second job that everyone wanted to avoid.

For most blocks, appointing a good managing agent is the more sustainable choice — especially in the early years when the RTM company is finding its feet. The question then is not whether to appoint, but who.

Our guide to managing your RTM company covers the directors' ongoing responsibilities in plain English, which is useful background whichever route you choose.

What to look for and the questions to ask

Not every managing agent is suitable for an RTM company. Here is what to check before you shortlist anyone:

• Regulation. The agent should be a member of ARMA (the Association of Residential Managing Agents) or RICS-regulated, or hold equivalent professional accreditation. Membership signals a code of conduct and complaints procedure.
• Client money protection. Your service charge float and reserve fund must be held in a designated, protected client account. Ask for evidence — this is non-negotiable.
• References from comparable RTM companies. An agent experienced with RTM companies understands that they work for the directors, not the freeholder. Ask for two or three references from similar-sized blocks.
• Fee structure. Management fees are typically a percentage of the annual service charge budget, plus additional charges for specific tasks. Understand exactly what is included in the base fee and what will trigger an extra charge before you sign anything.

At interview, ask how they would handle a major works project, how they communicate with leaseholders, and what their typical response time is for maintenance calls. The answers will tell you as much as the credentials.

The management agreement: fees, scope and notice periods

Before you sign a management agreement, read it carefully — or have a professional review it. The three things that catch RTM companies out most often are:

• Scope creep. Some agreements are vague about what is included, leaving room for the agent to charge extras for routine tasks. The agreement should list services explicitly.
• Auto-renewal clauses. Agreements that renew automatically for another fixed term unless you give notice by a specific date can lock you in for longer than you intended.
• Notice periods. A reasonable notice period to terminate is typically one to three months. Longer than that — especially combined with an auto-renewal clause — gives you very little flexibility if the relationship breaks down.

It is worth negotiating these terms before signing, not after. An agent confident in their service will not object to fair notice terms.

Replacing a managing agent without leaving a gap

If your current agent is not working out — slow to respond, opaque about spending, or simply not a good fit for an RTM company — you can replace them. The process is straightforward if you plan it properly.

Start by serving notice in accordance with your agreement, and begin interviewing replacements straight away. You want a signed agreement with the new agent before the old one's notice period ends. The outgoing agent is contractually obliged to hand over all records, including service charge accounts, contractor contacts, insurance documents and any maintenance history. Get a handover checklist in writing and do not release the final payment until everything has been received.

The gap that damages buildings is almost always caused by leaving too long a gap between appointing a new agent and the old one leaving. Overlap by at least two weeks if you can manage it, so there is continuity on routine matters like contractor payments and emergency callouts.

Finding vetted agents who understand RTM companies

One of the more practical problems newly formed RTM companies face is simply not knowing where to look. Not every managing agent has experience working with RTM companies, and experience matters — an agent used to reporting to a freeholder needs to shift their mindset when the client is a volunteer directors' company making democratic decisions.

Our RTM professional services page lists vetted managing agents alongside solicitors, accountants and insurers who work specifically with RTM companies. These are partners who understand the structure and can support you from day one, rather than learning about RTM on your building's time.

Appointing the right managing agent is one of the most consequential decisions your RTM company will make — but it is not irreversible. With clear criteria, a well-negotiated agreement and a proper handover process, you can change course without disruption if your first choice does not work out. That flexibility is part of what right to manage gives you.