The Sinker

The landlord seeks contributions from the tenant for a sinking fund for future anticipated works which they are not entitled to collect. A sinking fund may be established by a landlord to provide for major non-recurring expenditure anticipated during a long lease term, for example the replacement of windows, lifts, boilers or air conditioning plant. Where there is potential for abuse is where the fund is based on projections which are unrealistically high or unreasonable bearing in mind the length of the tenants’ leases.