In general, it is a good idea to keep savings for that unexpected expenditure and the proverbial ‘rainy day’. That’s why we believe it’s sensible for a development to have its own ‘Reserve / Sinking Fund’ (your lease sets out whether we can collect these at your development – we only do this where it is allowed).
These reserves are collected to help contribute towards the cost of non-annual expenditure like major repairs or external decorations. We will set out in the annual service charge budget how much is being collected in that year for this purpose.
The intention is that this collected money then accumulates over time, and the annual accounts we send you will illustrate how much is saved up at that time for your development. Any bank interest is credited to the reserve fund.
This money is held in the same way as other service charge money in a client trust bank account. This means the money is ring fenced for your development.
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