Cyclical Maintenance Fund - Advise

alan4545

Hi,

I am looking for some advise on Cyclical Maintenance funds ( Sinking fund).
My property factor has recently introduced a Cyclical Maintenance Fund charging £80 per year.
The property factor has stated this charge is mandatory as per my title deeds. I did challenged this charge and the property factor has now stated the amount can be reduced to zero but only if all the residents agree also.

The amount on the title deeds says - ( if £80 ) and does not stipulate how often.
Do i need to pay a Cyclical Maintenance Fund as per my title deeds?

Copy of deeds below
Any help would be appreciated. Thanks

1 9.4. In addition to the initial deposit a proprietor of a flat within a Block must pay to the party described in rule
19. 1 a Cyclical Maintenance Fund to be held in trust for the proprietors for the purpose of planned inspections and repairs and renewals following from the planned inspections on an annual or otherwise programmed basis

1 9.5 The initial Cyclical Maintenance Fund if £80 but may be increased in accordance with rule 16.1 (h).
1 9.6 Contribution to the Cyclical Maintenance Fund are non refundable.

davidmcn

alan4545 wrote: »

1 9.5 The initial Cyclical Maintenance Fund if £80 but may be increased in accordance with rule 16.1 (h).

It hardly seems likely that it would be less often than annual! Doesn't sound like an unreasonable amount anyway - I presume they're spending more than that?

What does rule 16.1(h) say?

alan4545

The property is less than a year old i could see the advantage of having a Cyclical Maintenance fund in say 10 years time. This is an additional charge on top of the regular factor charges and float. It goes into a separate account and is not being used to pay for any repairs.

16.1. At a meeting the proprietors may decide -
(h) to fix the amount of the maintenance charge, including the Cyclical maintenance fund ;

davidmcn

Well, looks like you either go along with what the meeting has decided, or call one. But given the deeds say £80 I doubt you'll have much luck arguing that it ought to be less.

(there'll be plenty of English people reading this who probably think £80 a month would be a good deal!)

patman99

Well, the idea of a sinking fund for future major works is not a bad idea.

I live in a leasehold flat which is self-managed, and 4 years back the appointed ManCo. Told us how much we should have set aside to carry out major works such as replacement of road surface, replacing collapsed sewers etc.

At that point we had no sinking fund. From that point forward we agreed to raise our monthly service charge to £75 a month to give a £5 excess to go into a sinking fund.

Your property may only be 1 year old, but if your service charge covers repairs to communal areas and these include unadopted roads within the development which may not be covered by insurance, then you will be glad of the sinking fund when the road or car parks require a major repair.