Q&As

A long lease of a flat contains no provision for a sinking fund and the landlord has requested the tenants' consent to vary the leases in the building order to introduce a sinking fund clause. Should the tenant agree to the lease being varied and what should one require/watch out for in terms of the sinking funds clause? Alternatively, what basis could one cite for refusing to agree to the variation of the lease?

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Produced in partnership with Carl Fain of Tanfield Chambers
Published on LexisPSL on 14/05/2020

The following Property Q&A Produced in partnership with Carl Fain of Tanfield Chambers provides comprehensive and up to date legal information covering:

  • A long lease of a flat contains no provision for a sinking fund and the landlord has requested the tenants' consent to vary the leases in the building order to introduce a sinking fund clause. Should the tenant agree to the lease being varied and what should one require/watch out for in terms of the sinking funds clause? Alternatively, what basis could one cite for refusing to agree to the variation of the lease?

For the purpose of this Q&A we assume that the tenant is a long leaseholder of a flat. Sinking funds are very useful tools for the landlord in paying for capital expenditure. If managed correctly, they can also be of benefit/value to the tenant because it will spread the cost of capital expenditure rather than a nasty large bill being demanded when the works are due to be carried out. Often well-advised purchasers will ask whether there is a reserve or sinking fund in place and this can add value to the leas

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