Part 1

Commonhold

Operation of commonhold

Reserve fund
39
1
Regulations under section 32 may, in particular, require a commonhold community statement to make provision—
a
requiring the directors of the commonhold association to establish and maintain one or more funds to finance the repair and maintenance of common parts;
b
requiring the directors of the commonhold association to establish and maintain one or more funds to finance the repair and maintenance of commonhold units.
2
Where a commonhold community statement provides for the establishment and maintenance of a fund in accordance with subsection (1) it must also make provision—
a
requiring or enabling the directors of the commonhold association to set a levy from time to time,
b
specifying the percentage of any levy set under paragraph (a) which is to be allocated to each unit,
c
requiring each unit-holder to make payments in respect of the percentage of any levy set under paragraph (a) which is allocated to his unit, and
d
requiring the directors of the commonhold association to serve notices on unit-holders specifying payments required to be made by them and the date on which each payment is due.
3
For the purpose of subsection (2)(b)—
a
the percentages allocated by a commonhold community statement to the commonhold units must amount in aggregate to 100;
b
a commonhold community statement may specify 0 per cent. in relation to a unit.
4
The assets of a fund established and maintained by virtue of this section shall not be used for the purpose of enforcement of any debt except a judgment debt referable to a reserve fund activity.
5
For the purpose of subsection (4)—
a
“reserve fund activity” means an activity which in accordance with the commonhold community statement can or may be financed from a fund established and maintained by virtue of this section,
b
assets are used for the purpose of enforcement of a debt if, in particular, they are taken in execution or are made the subject of a charging order under section 1 of the Charging Orders Act 1979 (c. 53), and
c
the reference to a judgment debt includes a reference to any interest payable on a judgment debt.