Glossary · Costs and income
Sinking fund
Also called: Capital reserve fund
In short
A one-off contribution each first buyer pays at transfer into the building's reserve for major repairs and replacements. Charged per square metre and not returned when you sell.
What it means
A building's lifts, pumps, roofs and facades wear out on a timescale of years. The sinking fund is the reserve that pays for replacing them, so that the owners are not asked for large sums at short notice.
How it works
- The first buyer of each unit pays it once, at transfer, at a rate per square metre set for the project.
- It belongs to the juristic person, not to the individual owner, and stays with the building when a unit is sold.
- It may be used only for the purposes the regulations allow, by decision of the owners.
- If it runs low, the owners can vote to top it up.
What to check
For a new project, ask for the rate and add the amount to your budget for the transfer day. For a building that is already occupied, ask how much is in the fund and what large works are coming. A thin fund in an ageing building means a bill later.