RERA IFMS Rules: New Maintenance Charges for UP Homebuyers
Uttar Pradesh RERA has introduced new IFMS rules to ensure transparent maintenance charges, protect homebuyers' funds, and make builders accountable for every rupee collected towards property maintenance.
- Separate bank account and FD mandatory for maintenance security funds.
- Fixed IFMS rates introduced for flats and commercial properties.
- Builders must transfer funds with interest to RWAs after project handover.
Uttar Pradesh: Uttar Pradesh Real Estate Regulatory Authority (UP RERA) has introduced new rules for Interest-Free Maintenance Security (IFMS) with immediate effect. The new regulations prevent builders from collecting arbitrary maintenance security charges and ensure complete transparency in handling buyers’ money. The move is expected to strengthen trust in the real estate sector and provide better financial protection to property buyers.
Under the revised rules, builders can no longer keep maintenance security funds in their personal or current bank accounts. Instead, they must open a separate bank account exclusively for IFMS collections and invest the amount in a fixed deposit (FD) with the bank offering the highest interest rate. The objective is to safeguard homebuyers’ funds while allowing the money to earn interest until it is transferred to residents.
Builders Must Follow Fixed Maintenance Rates
UP RERA has also prescribed maintenance security rates based on the category of the property, preventing developers from charging excessive amounts.
| Property Category | IFMS Rate |
|---|---|
| Multi-storey residential flats (Group Housing) | ₹20–₹100 per sq. ft. |
| Commercial shops (Non-AC) | ₹40 per sq. ft. |
| Commercial shops (Central AC) | ₹50 per sq. ft. |
The authority has clarified that these charges should only be collected according to the approved rates applicable to each property category.
According to the new guidelines, builders will be required to maintain complete records of the maintenance security collected from every homebuyer. After the project’s common areas such as lifts, parks, clubhouses, and other shared facilities are handed over to the Residents’ Welfare Association (RWA) or Apartment Owners Association (AOA), the builder must transfer the entire IFMS amount along with the accumulated interest.
In addition, developers will have to submit a detailed written account showing how much money was collected from each buyer and whether any amount has been spent.
The new rules are expected to prevent misuse of maintenance security funds by developers. Builders will not be allowed to use IFMS money for routine maintenance expenses or any unrelated business purposes. Instead, the fund can only be used for major repairs or replacement of common infrastructure such as elevators, generators, parks, and other shared facilities.
For homebuyers, this means greater financial security, improved transparency, and assurance that their maintenance deposits remain protected until the residents officially take over society management.
To further strengthen accountability, UP RERA has made annual auditing of the IFMS fund mandatory. The RWA or AOA must appoint a chartered accountant to audit the maintenance security account every year. The audit report must then be presented before residents during the Annual General Meeting (AGM) within three months of its completion.
The new IFMS regulations are currently applicable in Uttar Pradesh and are aimed at bringing greater transparency, accountability, and financial discipline to the state’s real estate sector while protecting the interests of homebuyers.
Also Read: Real Estate Agents Must Submit Quarterly Transaction Reports Under New UP RERA Rules
Also Read: UPRERA Issues Notices to 76 Projects for Missing Annual Audit Reports
