Leaseholders Sinking Funds - Frequently asked questions
The sinking funds have risen significantly this year. Why is that?
Following a survey of all our properties, it came to our attention that there was going to be a short fall in the amount of funds available to pay for the future cost of major works. We wanted to plan ahead for the expense to avoid sending large maintenance bills to our homeowners.
I am paying all this money each year and I don’t seem to see anything for it. Why?
The idea of a sinking fund is that the balance will increase over time so that when major works are required, the funds are available to pay for them.
Does this sinking fund cover general maintenance repairs?
No. We are unable to predict when a tile may fall off a roof (general maintenance) but we can predict when a whole roofs (major planned works) life span will expire. General maintenance is billed separately with your service charges and does not get deducted from your sinking fund.
Where does all my sinking fund money go?
Your sinking fund contributions are held in trust. They are kept in a separate bank account and only you (the leaseholder) benefits from any interest received on this money. We do not spend it without notifying you that we are doing so. Each year you will receive a statement showing you your balance and what income and/or expenses have gone through your account.
If I sell my home, will I get my sinking fund back?
No. The money stays with your home and could potentially make your property more attractive to a potential buyer. Our solicitors have to declare future major works that are planned to a property as well as provide information of the sinking fund balance when a sale/purchase is in process.
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