1. What are Reserves/Contingency Funds?
We all think it’s generally a good idea to keep savings for 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’.
The Reserve/Contingency Funds are collected to help contribute towards the cost of non-annual expenditure like major repairs, external and internal decorations. It can also be used to pay for the renewal or replacement of other major items such as communal items, including carpets, plus the major structural maintenance, e.g. lifts, roofs, fire safety systems.
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.
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 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.
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).