Month 13 additional service charge payment

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    Month 13 additional service charge payment

    A resolution was passed to require leaseholders to make an additional month 13 payment to increase reserve fund. Does this require every year a formal request along with summary of rights and responsibilities?

    Probably not the right answer but I would be asking to see the minutes of the AGM or the special meeting where it was passed. There must be notes and minutes recorded. Reach out to any of the directors on the management committee to obtain. If no such detail is present I would be querying it most strongly.

    I have a personal bug bear with reserve funds as once helped out a friend who's reserve fund was being spent on things it should not have been. The directors were just agreeing with works proposed by the managing agent who in turn did not have a clue as to who was responsible for the works. I found the majority of the directors had no real clue what they were doing, if it were my money I would have been furious.

    If AGM's or similar are taking place then attend and challenge challenge challenge in my humble view.

    Just my personal view

    All the best Stew.


      Thanks Stew for a prompt and helpful reply. Fortunately the money is being used properly. The concern is it the correct process is not being followed some may work out of not paying with an obvious excuse.


        Does the lease state there must be a reserve / sinking fund, as if it does not, then none can be implemented.


          Thanks ram. It was a unanimous A.G.M decision. Unfortunately, at the time, it was not properly explored legally. For about 15 years everyone has paid in response to a formal service charge demand. Even if this is done can I assume people can refuse anyhow ?


            Originally posted by scot22 View Post
            can I assume people can refuse ?
            If the lease does not state you are obliged to contribute to a reserve fund, then you can decline to pay into one. Don't forget to put money aside yourself, at the same rate it was suggested.

            A reserve fund must be for something specific, and be itemised and quantified, and that money should not be spent on anything other than what i was being saved for, otherwise if spent on other possible emergency work, you end up with a shortfall for that which you were saving for when the time comes.

            If any flat is sold, the new occupant can insist that a reserve fund, if not in the lease, is illegal ( It HAS happened )

            A decision by Directors / shareholders to alter the lease to add a reserve fund, or anything else, if not in the lease, is not legal unless the leases are changed, by a Deed of variation, through a tribunal ( F.T.T. ) .

            I assume there is no provision in the lease for a reserve fund ?

            If there is a provision in the lease for a reserve fund, ( and even if not ) and the contributions are not enough to obtain the amount required by a certain time, of course best to increase payments.
            Don't forget, if to sell up, you don't get that money back from the reserve fund.


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