BUILDING UP RESILIENT FUNDING
BUILDING UP RESILIENT FUNDING
HOUSE HEALTH
Going forward is all about maintaining the house annually which in itself saves on nearly all areas of the longer-term wear and tear.
RESEARCH PAPER ON SINKING FUND
Abertay University
© Abertay University 2022
Recently we have had some further drainage interventions and according to contractor inspections and de-scaling seem to be imperative.
Drain camera inspection.
Roof interior structural/woodwork inspection.
Also
Fencing repairs.
Access equipment and maintainence materials store shed (in yard).
STUCK WITH IT
Due to the era and such the construction and redevelopment works may have left us with a level of ongoing drainage/repair service use.
SCAFFOLD TOWER/STORE SHED
In order to lower service costs we are hoping to acquire an alluminium tower for our own use. These are reasonably priced second hand.
The shed will help keep paints, access tower, gardening and refurb materials secure.
HATCH INSTALL
We are arranging for a timber inspection and will insert a loft hatch at top of stair well in May in order to facilitate safe access.
SF
The Sinking Fund is as common as it is essential to maintaining this size and type of block, while greatly enhancing the potential appeal and value of our property.
RESEARCH PAPER
JUNE 9 first annual payment
The sinking fund is a set amount of money that is kept aside in a high interest account for large projects with the long-term well-being of the development in mind.
Projects which can be classified as 'major works' include roof repairs, window replacements and general projects to maintain the longevity of the development.
We understand that paying into a sinking fund allows for the future safety and well-being of a development to be met without compromise.
Without the sinking fund, residents would have to pay large lump sums of money in one go if emergency work needed to be carried out; something that not everyone would be able to do.
From June 9 2023 (annually till 2025)
Guide as of June 9 2023 - 225.00* per flat leaseholder.
*This payment needs to be amended (to 325.00) as per explainer email sent out to all tenants c15.00pm 03/05/2023.
Berry apologise for the economic inflationary pressures and circumstanses beyond our control, for the future charges likely amendments.
These payments are subject to careful revaluation, due to unprecedented cost of living inflation that affects us all since 2022 and into 2023.
We will of course be offering payment in 2 installments e.g. over June 9 and July 9.
Please read the following report for further information.
https://www.ons.gov.uk/economy/inflationandpriceindices/articles/costofliving/latestinsights
2024 - 245.00 per flat leaseholder.
2025 - 275.00 per flat leaseholder.
See our Link: https://www.gableshouse.org/med-term-services
About Sinking Funds:
https://www.whathouse.com/advice/new-apartment-owners-sinking-funds-explained/
HELP
https://www.citizensadvice.org.uk/debt-and-money/budgeting/budgeting/get-help-with-bills/
EXTRACT CAB
There are things you can do if you're struggling to pay your bills - for example your energy bills, rent and council tax.
If you owe money and you’re struggling to pay
You should speak to the organisations you owe money to – they might let you pay smaller amounts or take a break from payments.
Don’t ignore bills or letters about money you owe.
EXTRACT FROM
Leasehold and freehold charges: summary of research findings. LINK
This section briefly defines the key terms used in this report. Appendix A contains detailed definitions of these terms.
Freehold ownership – freeholders own both the land and the building that sits on it. This is typically the case for most houses, but some houses, mostly new-build homes, may be leasehold.
Leasehold ownership – leaseholders have the right to occupy and use a flat or house, and to share the use of other areas of the building or estate, for a given number of years.
Lease – the written contract between the freeholder and the leaseholder, giving the leaseholder the right to live in and use the property. The terms of the lease sets out the rights and obligations between the freeholder and leaseholder. Gables Lease link
Ground rent – an annual payment made by the leaseholder to the freeholder under the terms of a lease and not connected with the provision of services.
Service charge – a contribution payable by a leaseholder to the freeholder, or their managing agent, for a share of the cost of insuring, maintaining, repairing and cleaning the building.
Sinking fund – a sum of money collected from leaseholders, as part of their service charge, to cover the cost of future items of expenditure, such as a new roof, or replacement of lift.
Administration charge – an amount payable by a leaseholder to the freeholder, or their managing agent, for granting approvals under the lease, for the provision of information or documents, for dealing with a failure by the leaseholder to pay ground rent or service charges, or in connection with a breach of the lease.
Permission fee - an amount payable by a leaseholder for the landlord’s costs of dealing with applications for approvals, such as to make a structural alteration to a property.
Sinking funds
Leaseholders may be required to make additional contributions to a sinking fund to cover future major works (e.g. external decoration and replacement of the lift, boiler or roof) at the property at some future date, if the lease allows for the collection of a sinking fund.
This enables the cost of major works to be spread over a number of years. As with service charges, sinking fund contributions are subject to the same tests of reasonableness.
Payments into these funds are held on trust by the payee, and the leaseholders are not entitled to any refunds on unspent money when they sell their property. New leaseholders can therefore benefit from accumulated past funds.
The ComRes survey of leaseholders found that the majority (57%) of surveyed leaseholders who pay a service charge said this payment includes payment into a sinking fund.
Q10. As far as you are aware, does your service charge include payment into a sinking (or reserve) fund?
Yes 57%
No 22%
Don’t know 21%
Figure 7: Knowledge of sinking (or reserve) fund
Base: All respondents who pay a service charge (n=843)40 Almost three in ten (28%) of surveyed leaseholders living in a house said their service charge does not include payment into a sinking fund, whilst one fifth (19%) of surveyed leaseholders living in a flat say their service charge does not include payment into a sinking fund.
A quarter (24%) of surveyed flat leaseholders whose household pays a service charge said that they don’t know if a sinking fund is included, compared to 12% of house leaseholders who said that they don’t know if a sinking fund is included.
The majority of interviewed stakeholders thought it prudent to have a sinking fund in place to cover emergency payments and major items of expenditure, and to avoid large one-off bills.41
40 For more information, refer to Appendix C, page 21 41 For more information about views of the interviewed stakeholders and leaseholders on sinking funds, refer to Appendix B, pages 24 - 28, and Appendix D, pages 17- 18 30 As discussed by interviewed stakeholders,
42 managing agents have different methods for operating sinking funds.
Based on experience, managing agents often forecast what the building will need in the longer term so they can plan ahead:
We don’t want our customers to worry about having invoices for major works. (Housebuilder 2)
We have sinking funds to ensure there are no surprises. (Housebuilder 3)