Maintenance and sinking funds - Planning works ahead of time

Already, this year I have become aware of two fairly serious cases of inadequate funding to carry out major repairs on blocks of apartments.   In both cases, the cause has been due to the salt air close to the seafront where metal frames or railings are prone to corrosion.   In both cases, there had been recommendations made towards annual decorating or maintenance, but the costs hadn’t been well received by the leaseholders and therefore the works postponed.

This ambition to keep maintenance payments cheaper is always tempting.  But, if there is an inadequate maintenance schedule this can lead to bigger cash calls later.   In both cases that I have seen recently, the lessee’s have enjoyed maintenance charges of £500 to £600 per year for the last 7 or 8 years.  However, the lack of a decorating schedule has now left each apartment with a potential maintenance bill of over £20,000 for emergency works.

The main issue is that within any block of flats or group of people you will get many circumstances, personalities and views.   Some may desire quality workmanship of the highest order, where as some may prefer cheaper contractors or to “plaster over” problems.  We also need to consider that some people do not budget for the costs and so freeholders or agents are often chasing unpaid maintenance bills.    It only takes one or two owners in a block to not pay and this and the agent cannot instruct the works. 

So, if you own a leasehold, make sure that there is a maintenance schedule over the next 5 year period minimum.  Have it costed and make sure that a sinking fund is being built up to avoid any nasty surprises that may come about.  Remember, whilst you only “lease” the living accommodation, you are responsible for ensuring the building is maintained.

Tags: estate agent, sinking funds, maintenance works
Category: Maintenance and sinking funds - Planning works ahead of time
Paul McGuirk - 15/05/18
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