Taking back control of a Residents Management Company, a case study, pt 3

There's a widespread misconception about the role of leases and transfer deeds in relation to membership of the RMC. Specifically, that if it says in a lease or a transfer that the owner of the lease (or of the property transferred) that the new owner has a right or an obligation to join the company, then that means that person must be a member.

Just to step back and think about it in the abstract: being a member of a company brings benefits (e.g., dividends) and risks (having to bail out the company if it goes bankrupt). It's therefore untenable that anyone could become a member of a company except by their agreement with the company itself or by trading places with an existing member. (In the case of RMCs, the benefit is having a say in the governance, and the risk is potentially unlimited liability for meeting the RMC's running costs).

The logical necessity of agreement is reflected by the requirement for the member's consent to join the company, in section 112 of the Companies Act. The other requirement for company membership is that one be registered in the company's register of members. It is not enough that one have the right or the obligation to be a member of the company; the company's directors have to have registered someone as a member, or they're not a member: they're just a *potential* member whose rights have been breached.

There are *statutory* rights to join a Right To Manage company and statutory obligations to join a commonhold association. But there's no statutory right to join an RMC: that right or obligation will only exist in the company's articles of association, if it exists at all.