Reserve Funds
The objective of a reserve fund is to collect for non-annual major works, such as decorating, so that in the year the work is carried out there is not a large increase in the service charge collection. As far as possible, and in consultation with residents, we try to set the level of reserve fund collection so that very little extra payment, if any, is required when substantial building expenditure needs to be incurred.
The reserve fund is invested in an interest bearing account and the level of the fund and the interest earned, together with details of any expenditure from the fund are all shown as part of the annual service charge account.
When you come to sell your property, prospective purchasers should look favourably upon the existence of a reserve fund which will prevent substantial increases in service charges, particularly if the building is due for decoration.