If you’re planning to buy a home, especially in Uttar Pradesh, there’s good news for you. RERA has introduced new rules to protect homebuyers from builders who collect large maintenance security deposits but fail to explain how that money is used.
The new rules focus on Interest-Free Maintenance Security (IFMS) and aim to make the entire process more transparent. Builders will now have to follow strict guidelines on how they collect, store, and use this money.
Contents
Builders Can No Longer Keep Your Money in Personal Accounts
Under the new RERA rules, builders cannot keep maintenance security funds in their personal or current bank accounts.
Instead, they must open a separate account and place the money in a fixed deposit (FD) with the bank offering the highest interest rate.
This ensures that homebuyers’ money stays safe and continues to earn interest until it is transferred.
Maintenance Charges Fixed for Different Properties
RERA has also set clear maintenance security rates based on the type of property. Builders can now collect charges only according to these approved categories.
| Property Type | Maintenance Security |
|---|---|
| Multistorey flats (Group Housing) | ₹20 to ₹100 per sq. ft. |
| Commercial shops (Without Central AC) | ₹40 per sq. ft. |
| Commercial shops (With Central AC) | ₹50 per sq. ft. |
Builders Must Give a Full Account of the Money
Once the builder hands over the society’s common areas, such as parks, lifts, clubhouses,
and other facilities, to the Residents’ Welfare Association (RWA) or Apartment Owners Association (AOA), the entire maintenance security amount, along with the interest earned, must also be transferred.
Builders will also have to provide a complete written record showing how much money was collected from each homebuyer and how every rupee was spent.
Money Can Be Used Only for Major Repairs
The new rules clearly state that maintenance security money cannot be used for regular day-to-day expenses.
It can only be spent on major repairs or replacement of common facilities like elevators, generators, parks, and other shared infrastructure within the society.
Annual Audit Now Mandatory
To improve transparency, the RWA or AOA must get the maintenance fund audited every year by a Chartered Accountant (CA).
The audit report must be presented to all residents during the Annual General Meeting (AGM) within three months, ensuring everyone knows how the money has been used.
Where Has This Rule Been Implemented?
These new maintenance security rules have been implemented in Uttar Pradesh.
The main objective is to protect homebuyers’ money, improve transparency, and make builders fully accountable for every rupee collected as maintenance security.