What happens if there is not enough money in the Sinking Fund account to cover the cost of major work required? | Frequently asked questions

What happens if there is not enough money in the Sinking Fund account to cover the cost of major work required?

This doesn’t happen very often. However there are instances where work is required sooner than had been estimated in the stock condition survey report or work costs more than has been estimated. In this case, there may be insufficient money in the sinking fund account to cover the cost of the work required. 

When this happens, we will consult leaseholders at the scheme about this and agree the action that needs to be taken. We may agree that it is appropriate to delay the planned works being undertaken. However, it may not be appropriate to delay work that is deemed as essential and/or emergency work and in this case, it is normally possible for JJH to arrange for the works to be completed and send a separate bill to leaseholders to cover any outstanding costs once the sinking fund balance is at zero. In some cases it may also be possible to include the cost of the work as an additional charge within the service charge accounts if there are insufficient funds in the sinking fund. Where individual leaseholders may have difficulty paying for the work, JJH will discuss individual payment arrangements with them and there are a range of options available. 

If you require further explanation about the sinking fund held for your scheme, please take the opportunity to discuss this at the annual service charge meeting normally held during the month of March.