Sinking fund (reserve fund)
A sinking fund (often called a reserve fund) is money collected via service charges and set aside to help pay for future major works on a leasehold building or estate.
Last verified: 23/05/2026
Definition
A sinking fund (also known as a reserve fund) is money built up over time from service charge contributions. It’s intended to reduce the impact of large future bills for major repairs (like roof replacement).
Practical implication
A contribution to a sinking fund is still a cash cost for you now, and you will not usually be able to recover contributions if you sell.
Related terms
- Service charge
- Leasehold