Sinking funds within the service charge in the UK office market: Evidence upon best and actual practice

Abstract

Purpose

The paper aims to examine how to create a sinking fund, the legalities of its creation and ownership, taxation issues and the accounting treatment of tenant contributions towards sinking funds within service charges demands in the UK office sector.

Design/methodology/approach

The paper reviews the prescriptive guidance that the 2007 RICS Code of Practice makes in terms of the creation and operation of such funds, and concludes within an empirical investigation of industry practice on sinking funds from 2004‐2008.

Findings

The paper reports whether the Code has improved practice, disclosure, communication and transparency in terms of such funds and speculates on how a future Code might further improve on existing management.

Originality/value

The data are original, and findings conclusively prove the need for enforcement of the existing Code, and necessary revisions as well.

Citation

Eccles, T. and Holt, A. (2010), "Sinking funds within the service charge in the UK office market: Evidence upon best and actual practice", Property Management, Vol. 28 No. 3, pp. 163-173. https://doi.org/10.1108/02637471011051309