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What are Reserves/Contingency Funds?
We all think it’s generally a good idea to keep savings for that un-excepted 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).
The Reserve/Contingency Funds are collected to help contribute towards the cost of non-annual expenditure like major repairs, external and internal decorations. We set out in the annual budget how much is being collected in that year, and the money accumulates over time. The annual accounts contain a statement of the overall amount for your development.
The money is held in the same way as other service charge funds in a trust account with any interest being for the benefit of the reserve fund. The money can only be spent on your development.
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 statutory trust at National Westminster Bank plc in your development’s name. (Please note: We have transferred our development bank accounts, sometimes also referred to as “client bank account” from Royal Bank of Scotland (RBS) to Barclays, please view our Client Banking page for more details.
This account is held completely separate from all other FirstPort accounts. Any interest is paid into the account and is for the benefit of you as leaseholders.
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).
Why do I have to pay additional charges?
From time to time, you might 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 fulfill 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.