no sinking fund

Actor31 · 16 March 2017 at 7:16PM

I live in a block of flats and the council have put new balconies and refurbed the outside and also fitted new front doors and it was to come out of the sinking fund in the service charge.
But I have been informed that there is no money in the sinking fund so they have given me a bill of £15,469 pound, they have also sent a letter offering options they get equity in the flat or i can have a loan which i cannot pay and they have also advised that my service charge was set to low. If i had known beforehand that i would have to pay for the said works i would have ask them not to do them. because i cannot afford or find this huge amount of money. what do I do and what are my options.

marliepanda · 16 March 2017 at 7:20PM

I take it you own?

Yeah that's basically the one huge warning that everyone says about buying in a council block. You get no say over the refurbishments and you have to pay because you chose to buy. Council tenants will not:

You also don't get to deny the other tenants the right to a refurb because you don't want to pay.

AdrianC · 16 March 2017 at 8:06PM

How much of your service charge goes towards this sinking fund? What do the last accounts you were sent say about the balance? Is this really the absolute first notification you've had?

eddddy · 16 March 2017 at 8:15PM

Any major works where your contribution would be over £250 should have gone through a section 20 consultation process. So the cost shouldn't be a surprise.

See: http://www.lease-advice.org/advice-guide/section-20-consultation-for-private-landlords-resident-management-companies-and-their-agents/

Also, are any of the works for improvements (as apposed to maintenance and repairs)? If so, check your lease to see if you are required to pay for improvements.

Actor31 · 18 March 2017 at 4:42PM

I was told that the improvements would be paid out of my sinking fund, which is what happened in the past with maintenance and when the old balconies needed repairing. But i have been informed with this recent bill that i have nothing in my sinking fund. i had no say in whether or not I wanted the work done because it is a 12 storey block of flats. i have also been informed my service charge was too low and that is also going up

Actor31 · 18 March 2017 at 4:44PM

The cost is not the surprise, the fact that my sinking fund will cover it is.

hazyjo · 18 March 2017 at 5:10PM

Very common for private owners of ex-LA flats to get a big bill land on their doorstep. Did nobody warn you when you bought it? I've been saying it for years on here...

Not much you can do I'm afraid. They just do it and bill you. If there's a lift, that can result in another big bill. Could you sell and buy cheaper or take a personal loan?

Second job?

Jx

Actor31 · 18 March 2017 at 10:09PM

live on a rough area nothing cheaper and was hard enough to get one job

Actor31 · 18 March 2017 at 10:10PM

Cant afford a loan be better off out of work

hazyjo · 18 March 2017 at 11:42PM

You still haven't confirmed - we are presuming you bought this property. Not sure why a lender gave you a mortgage (presuming they did) if money is that tight. Plus they don't usually lend on ex-LA flats more than 4 or 5 storeys (unless parts of London?). Wouldn't it have been easier to rent? Can you elaborate? Have your circumstances changed since you got the flat? Is someone else meant to be contributing?

Jx

always_sunny · 19 March 2017 at 10:47AM

Actor31 wrote: »

If i had known beforehand that i would have to pay for the said works i would have ask them not to do them. because i cannot afford or find this huge amount of money. what do I do and what are my options.

Are you suggesting that the Freeholder did the work without consulting Leaseholders and then give all of you £15,469 bill?

I thought that:

Charges for major works
Your freeholder has to consult you if they are going to:
set up a service such as gardening or cleaning that will cost you more than £100 a year
carry out a repair or improvement that will cost you more than £250

With that in mind though, you should/would know if there is a sinking fund cause you'd pay into it. If you don't pay nothing towards a sinking fund (Ground Rent and Service Charges are obviously not the same) then why would you be surprised after? As a home owner you need to pay all costs (or share of the total cost with other leaseholders).

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no sinking fund

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