Keeping accounts

You should have a common bank account to hold advance payments for repairs. This may be managed by your Owners Association or Property Factor/Manager. A Building Reserve Fund is a way of saving for future large repairs.


A float is a small advance payment kept in your maintenance account or by your property manager/ factor.  It is used to ensure that money is available to deal with minor repairs quickly without having to take time to contact each owner. 

Floats and your factor

Maintenance Accounts

A maintenance account is used to hold money for upcoming repairs.  It is where you will keep the float paid by each owner and advance payments for upcoming repairs.  The Tenements Act sets out the rules for setting up and managing maintenance accounts.

They must:

  • Be held in a bank or building society
  • Be interest bearing accounts
  • Require at least two owner signatures or the property manager’s authorisation for making payments.

When a repair is planned, and owners are asked to make and advance payment for a repair, they must be told, in writing

  • What the repair is
  • Why it is required
  • The estimates received
  • Their and other owners’ shares.
  • Who made the decision to carry out these repairs and when
  • A timetable for the work
  • Refund arrangements if the work does not go ahead

When you set up a Maintenance Account, you should ask for a Treasurers Account.  You will probably need to have a constituted owners association.  You will also need a minute of meeting showing who is nominated to manage the account.

Next Steps

Download rules for running a maintenance account.

Legal reference

Rules 3.3 and 3.4 Tenement Management Scheme. Tenements (Scotland) Act 2004

Building Reserve Funds

A Building Reserve Fund is a way of saving for future major repairs.  It must be written into your title deeds as this is the only way you can ensure that new owners are obliged to pay into the fund.

The Reserve Fund is not for use on day to day repairs – this is what your Maintenance Account and float is for.  It is for major repairs which may arise unexpectedly or which can be foreseen as all parts of your building have a limited life expectation.

Reserve funds are fair. Everyone pays a share of the costs each year so people who use the lifts for ten years and then move out, have paid to replace them. People who move in just before the work is done aren’t penalised.

When you come to sell your flat, you will be able to tell prospective buyers of the arrangements for keeping the property in good repair, the amount of money in the fund and what they need to budget each year for repairs. This will be a positive feature in any sale.

The amount paid into your reserve fund should be determined by a maintenance plan made following a good survey of the building.

As it will be used for planned repairs and replacements, the reserve fund can be paid into a term deposit amount where it will earn more interest.

The share each owner has paid is not returned when an owner sells but its value is not lost as it increases the value of the flat to incoming owners.

If there is insufficient money in the reserve fund to deal with major works the additional costs are shared between owners according to the rules for your building.

You need a fallback provision for owners who do not pay into the Reserve Fund. This should provide an obligation for owners to pay their share when they sell their flat.

If your title deeds don’t contain a clause allowing you to set up a Building Reserve Fund, you can add a clause providing all owners agree.  See Changing Your Title Deeds.