Deferred Building Fund

glitteringgem

Hi All,

I own a flat with the landlord being a Housing Association, within the lease there is a clause regarding a deferred building fund to be paid by myself when I sell the property.

The rate of the deferred building fund is one twelve of 1% of the 100% purchase price of the property (I own 75% as shared ownership) per month that I have owned the property. As I have lived in the property 184 months I will be paying the Housing Association in the region of £9.5K.
This is on top of having paid 0.5% per year as part of the regular building fund.

Is this kind of deferred building fund normal?

I feel that it is going to be an unreasonable amount of money especially as no major work has taken place in the last 15 years and none is needed or scheduled in the foreseeable future. General painting internally and externally is taken from the service charge and there is already £30k in the building fund.

Is there any grounds to see if they would take a lesser sum?

Any input would be gratefully received - thank you.

HampshireH

I can't help but if these were the t's and c's you signed up to when you night it then I don't know what grounds you would have to dispute it now you are considering selling.

AnotherJoe

glitteringgem wrote: »

Hi All,

I own a flat with the landlord being a Housing Association, within the lease there is a clause regarding a deferred building fund to be paid by myself when I sell the property.

The rate of the deferred building fund is one twelve of 1% of the 100% purchase price of the property (I own 75% as shared ownership) per month that I have owned the property. As I have lived in the property 184 months I will be paying the Housing Association in the region of £9.5K.

I feel that it is going to be an unreasonable amount of money

Why then did you agree it it when you bought?

glitteringgem wrote: »

Hi All,

I feel that it is going to be an unreasonable amount of money especially as no major work has taken place in the last 15 years and none is needed or scheduled in the foreseeable future.

Apartment buildings are expensive to work on. This kind of money is really self insurance in case something goes wrong (roof, windows?) because pretty much whatever it is it will be pricey.

The prudent and obvious thing to do would have been to have saved 1/12th of 1% in a high rate savings account every month ready for moving out. Or simply think of 1/12th of 1% (whatever that amount is) of every mortgage payment you took off the capital as being saving in advance for this, which in your case is the situation, the money comes out of your equity. A bit risky if the flat didn't appreciate in value though.