Answers for directors of self-managed buildings
Plain-English answers for the directors of residents’ management, Right to Manage and share-of-freehold companies, checked against the law and official guidance.
What happens to directors if there’s a fire and they haven’t followed fire safety law?
Failing to follow the Fire Safety Order is a criminal offence. A director, manager or secretary of a company can be personally guilty if the offence happened with their consent or connivance or because of their neglect. On conviction in the Crown Court the maximum is two years in prison, a fine, or both.
Do we need a professional fire risk assessment, or can the directors do it themselves?
The law requires a suitable and sufficient fire risk assessment, not a professional one. For a small, simple block the Government’s own guide is written so that you can do it yourself. If you don’t feel able to interpret it for your building, or your building falls outside its scope, you should use a competent fire risk assessor.
Do we need a new fire risk assessment every year?
No. The law sets no fixed interval. The assessment has to be kept under regular review, and reviewed whenever you suspect it’s no longer valid or something significant changes. For small, simple premises, an annual review is recognised as good practice.
Who is responsible for asbestos in the common parts of a block of flats?
The person responsible for the common parts, usually the freeholder or the residents’ or RTM company that maintains them, has the duty to manage asbestos there. It doesn’t cover the inside of individual flats. The duty can’t be passed to a managing agent.
Do RTM and share-of-freehold companies still have to follow the Section 20 process?
Yes. Being run by the leaseholders doesn’t exempt the company. If any one leaseholder’s share of a set of works would be more than £250, the company has to follow the Section 20 consultation process first. If it doesn’t, and the tribunal doesn’t excuse it, each leaseholder can only be made to pay £250 towards the works.
Does a roof repair need a Section 20 consultation, and what happens if we skip it?
Yes, usually. Roof repairs are “works on a building”, and consultation is needed once any one leaseholder’s share would come to more than £250. In a block of six equal flats that is £1,500 of work. If you skip it, and a tribunal doesn’t excuse you, you can only recover £250 from each leaseholder and the company has to find the rest.
Does our building company have to record people with significant control (PSCs)?
Yes. Every company has to identify its people with significant control and tell Companies House who they are, or tell Companies House that it has none or can’t identify any. Since 18 November 2025 the company no longer keeps its own PSC register; the information is filed at Companies House instead.
Do the directors have to meet in person to approve the annual accounts?
No. The Companies Act requires the board to approve the accounts and one director to sign the balance sheet, but not a physical meeting. Under the model articles the directors can decide by a unanimous written resolution, or at a meeting held by any means, such as video. A private company also doesn’t have to hold an annual general meeting, though it must send the accounts to its members.
Do RTM and share-of-freehold companies need an accountant?
No law requires a residents’ company to use an accountant. The directors have to keep accounting records, prepare the accounts, approve and sign them, and file them. A small company is also exempt from audit, but members holding 10% can require one.
Do residents’ management and RTM companies pay corporation tax on service charges?
Every limited company has to file accounts with Companies House, including residents’ management and RTM companies. Service charge and sinking fund money is held on trust and, according to HMRC, falls outside corporation tax. Only the company’s own income, such as ground rent or fees it charges, is taxable.
Does a block of flats need annual gas safety checks and lift inspections?
For a block of flats with long leases, annual gas checks and six-monthly lift examinations are commonly expected, but they are not set out as statutory duties for a residents’ or freehold company. Leases, insurers and the Health and Safety at Work etc. Act usually bring them in anyway.
Does our RTM or residents’ company have to keep a register of members, and can it affect our Right to Manage?
Yes. Every company must keep a register of its members, and failing to is an offence by the company and every officer in default. For an RTM company the stakes are higher: the Act counts members on the day the claim notice is given, and under the Companies Act a person becomes a member by agreeing to it and having their name entered in the register. A register that was never written up gives a freeholder an obvious argument that you never had enough members.
Can the freeholder end our Right to Manage, and what could make it end by accident?
Not by serving a notice. Once the company has the right to manage, the Act lets it end by agreement with every landlord, or automatically in a short list of situations. The one directors can cause themselves is the company being struck off the register for not filing. Before the right is acquired, the freeholder can challenge the claim with a counter-notice, and the tribunal then decides.