Leasehold flat sinking fund - how much you pay?

always_sunny

I bought a LH flat a while ago, it's a converted house, only 2 flats.
We have no sinking fund - the lease states we will take care of the house as needed.
We have no service charges (at least I do not) and ground rent is also next to none, no shared/communal areas.

I understand that houses need maintenance, that's fine, so I was wondering, how much is put aside for sinking fund so that I can do the same in a separate account!

da_rule

Is there buildings insurance that you and the other leaseholder contribute towards?

eddddy

It depends on the condition of the building, the age of the building, the amount of maintenance it requires etc.

e.g. If the roof is going to need replacing in, say, 5 years, you need to put more money aside than if it would need replacing in 25 years.

Similarly, when do you plan to repaint the outside, repaint the communal areas etc?


It might be easier to make a list of the maintenance/repair work that might come up over the next few years, with a rough costing for each job. And then save up accordingly.

da_rule

Also, you need to think about the other leaseholder, can you depend on them paying their fair share? Is there anything in the lease that would force them to do so?

AlexMac

Our Service charges have ranged from a current £420 a year, to £1300 p.a and both of those included a good contribution to a sinking fund. But in one other flat where it was £900 p.a there was no kitty for future maintenence se we increased it by 10% to build up a cushion.

External decorations tends to be the big recurrent job; every 5-10 years dependng on condition (and sometimes prescribed in the lease), so work out what that is going to cost ( £800- £1.2K depending on wheter you'll need scaffolding), how much you have left p.a from existing charges after insurance (the usual essential) then wheter you want to be able to pay for it all from the sinking fund or will be happy with a top up one off payment when you do decorate? And hope the roof don't leak of gutters drop off meanwhile!

katejo

always_sunny wrote: »

I bought a LH flat a while ago, it's a converted house, only 2 flats.
We have no sinking fund - the lease states we will take care of the house as needed.
We have no service charges (at least I do not) and ground rent is also next to none, no shared/communal areas.

I understand that houses need maintenance, that's fine, so I was wondering, how much is put aside for sinking fund so that I can do the same in a separate account!

i used to have a similar flat (but purpose built as 2 flats not converted). i paid ground rent but no service charge. The freeholder was useless and did nothing. The lease stated that I was responsible for maintenance of the upper part/roof and the other leaseholder for the lower part but the cost of repairs to either half should be shared. Not long after purchase I became aware that a new roof was required. The downstairs flat refused point blank to contribute more than a few hundred. I could have taken her to court but that would have taken weeks (during which my ceilings would have been damaged by rain/damp). My Dad ended up helping me with the cost of a new roof.
I have now escaped from leasehold!