Who actually runs your block depends on the legal structure behind it. Two common setups are a freehold residents management company — where residents own the freehold via a company — and a leasehold management company, where a landlord or their agent manages under the lease.
This guide explains how each works and what it means for you. Where residents already control the company, self-management is a practical, affordable option for most small blocks. A managing agent remains the right choice for blocks that want hands-on professional support.
What Is a Freehold Residents Management Company?
A freehold residents management company is a company that owns the freehold of the building. Its members are usually the leaseholders or their nominees. The same people who live in the flats collectively own the freehold and, through the company, make decisions about management, repairs, and spending.
The company may employ a managing agent to handle day-to-day work, or residents may do more of it themselves. This structure is common in purpose-built blocks where the developer sold the freehold to a residents management company, and in blocks that have gone through collective enfranchisement.
What Is a Leasehold Management Company?
A leasehold management company typically acts on behalf of the freeholder. It does not usually own the freehold — it manages the block under a contract with the freeholder. Leaseholders pay service charges to fund that management, but they do not control the company unless they have acquired the right to manage or bought the freehold.
Confusingly, the term "management company" is also used for residents management companies that hold the freehold. When you see "management company", check who owns it and who appoints the directors. That tells you who is really in charge.
How Each Structure Affects Decision-Making and Transparency
With a freehold residents management company, residents typically approve budgets, choose agents, and set policies. That can mean better transparency — because you are in the room when decisions are made — and more accountability, because the directors are your neighbours.
With a leasehold management company that reports to a separate freeholder, leaseholders rely on their legal rights: to receive accounts, to be consulted on major works, to challenge unreasonable charges. Transparency depends on the freeholder and agent doing what the lease and law require.
Pros and Cons of Self-Managing vs Delegating to an Agent
Even when you have a residents management company, you can still delegate — or not. Many blocks hire a managing agent to handle repairs, insurance, compliance, and billing. Others use block management software to self-manage most day-to-day work, with directors staying accountable in one place.
The risk with an agent is picking one who does not report clearly or who takes over decision-making by default. The risk with self-management is weak processes — a dedicated system helps keep compliance straightforward. Our share of freehold vs leasehold guide looks at who holds power in practice.
Compliance, Insurance, and Record-Keeping
Both setups must comply with fire safety, health and safety, and accounting rules. Directors of a freehold residents management company can be personally liable if the company fails to keep proper records or meet its duties.
Good record-keeping and a clear understanding of who does what protect everyone. If you are thinking about changing structure, take advice on the legal and tax implications before you proceed.
How Freehold.Pro Helps
Whether you run a freehold residents management company or work within a leasehold structure, Freehold.Pro gives directors a single place for finances, documents, and compliance records.
Try Freehold.Pro free, no contract required. Get started today.