1. What is a reserve or contingency fund?
In general, it is a good idea to keep savings for that unexpected expenditure and the proverbial ‘rainy day’. That’s why we believe it’s sensible for a development to have its own ‘Reserve/Contingency Fund’ (your lease sets out whether we can collect these at your development – we only do this where it is allowed).
These reserves are collected to help contribute towards the cost of non-annual expenditure like major repairs or external and internal decorations. We set out in the annual budget how much is being collected in that year. The money accumulates over time, and the annual accounts we send you also show a statement of the overall amount saved for your development. Any interest is credited to the reserve fund.
The money is held in the same way as other service charge money in a trust account. This means the money can only be spent on your development.
2. Where do you keep the money I pay you?
The service charge (and reserve/contingency) money you pay FirstPort is held in a bank account under what’s called a statutory trust. This means that should anything happen to FirstPort, such as it went into liquidation, your money is kept safe and outside the liquidation process. The account is held at Barclays Bank in your development’s name. This account is held completely separate from all other FirstPort accounts. Any interest is paid into the account and is for the benefit of residents at the development. Funds in your development bank account are safe, completely independent and can only be used for the purposes of your specific development.
All our bank accounts are protected by the UK regulator, the Financial Services Authority (FSA) and the Financial Services Compensation Scheme (FSCS).
3. Why do I have to pay additional charges?
From time to time, you might have to ask us to carry out some additional services specifically for your home. For example, if you are planning to sell your property, you or your solicitor might need to request a detailed information pack. Or perhaps you may wish to seek formal consent from your landlord to sub-let your property or to keep a pet (if your lease requires it).
Your lease may also set out some specific legal obligations for you to fulfil on buying, selling or transferring your property so that legal records can be properly updated. For example, your solicitor may need to serve a Notice of Transfer when you purchase or perhaps a Licence to Assign on selling or transferring your property.
As these requests are particular to an individual property and circumstance, they are not covered by the service charge you pay – which goes towards all the communal running costs and services. That’s why we have to ask you for a fixed fee for each specific service required – to cover the additional work we do. We benchmark these costs regularly to ensure that they are reasonable.