Buying a home in Uttar Pradesh is set to become safer for thousands of buyers. UP RERA has introduced new IFMS (Interest-Free Maintenance Security) rules that aim to protect the maintenance money collected by builders.
The new rules apply to projects in cities such as Noida, Greater Noida, Ghaziabad, Lucknow, and other parts of the state.
The biggest change is that builders will now have to manage maintenance funds in a transparent way.
This will reduce the chances of misuse and ensure the money is used only for maintaining the housing society.
Why Did UP RERA Introduce These Rules?
Many homebuyers had complained that builders collected large amounts as maintenance security but did not clearly explain how the money was being used.
There were also concerns about delays and lack of transparency when these funds were transferred to Residents Welfare Associations (RWAs).
According to UP RERA Chairman Sanjay R. Bhoosreddy, the new rules are designed to improve transparency, accountability, and financial discipline.
They also ensure proper investment of the funds, timely transfer to RWAs, and regular audits.
7 Important Changes in the New IFMS Rules
Separate bank account is mandatory: Builders must keep IFMS money in a dedicated bank account. It cannot be mixed with other maintenance charges or the builder’s personal funds.
Funds must be invested in the best FD: Builders must compare bank interest rates and invest the money in the fixed deposit offering the highest return.
Full fund transfer to RWA: When the project is handed over, the builder must transfer the complete IFMS amount to the RWA or Association of Allottees.
Detailed account records required: Builders must provide unit-wise collection details, expenses, audit records, and the final balance while handing over the funds.
Money can be used only for maintenance: The IFMS amount can only be spent on repairs or replacement of common facilities such as lifts, parks, generators, and other shared infrastructure.
Annual CA audit for RWAs: RWAs must maintain a separate account for IFMS funds. The accounts must be audited by a Chartered Accountant,
and the audit report must be shared with members during the AGM within three months.
Project-wise IFMS rates fixed: UP RERA has also set IFMS rates based on the type of project.
IFMS Rates Fixed by UP RERA
Group housing (residential): ₹20 to ₹100 per sq. ft., depending on the flat category.
Commercial projects without central AC: ₹40 per sq. ft.
Commercial projects with central AC: ₹50 per sq. ft.
Separate rates have also been fixed for residential and commercial plotted developments.
What This Means for Homebuyers
The new UP RERA rules are expected to give homebuyers greater confidence. Builders will no longer be able to divert maintenance security funds for other purposes.
At the time of project handover, RWAs will receive complete financial records along with the full maintenance fund, making the entire process more transparent and accountable.