UP RERA notifies new IFMS rules for homebuyers in Noida

The Uttar Pradesh Real Estate Regulatory Authority (UP RERA) has introduced new rules for the collection, management, investment, transfer and utilisation of Interest Free Maintenance Security (IFMS) funds collected from homebuyers. The amended provisions, incorporated under Regulation 47 of the UP RERA (General) Regulations, 2019, came into effect in July.

Under the revised rules, promoters must collect the IFMS amount at the time of registration of sale, lease or sub-lease deeds and deposit the entire amount in a separate designated bank account. The funds must be invested in a fixed deposit scheme offering the highest rate of interest after obtaining quotations. For group housing projects, the IFMS has been fixed between Rs 20-100 per square foot depending on the category. Commercial projects will attract IFMS of Rs 40 per square foot for non-central air-conditioned developments and Rs 50 per square foot for centrally air-conditioned projects.

Promoters must transfer the entire IFMS corpus to the Residents' Welfare Association or the Association of Allottees when handing over common areas. They must provide a detailed transfer statement with unit-wise collections, expenditure, audit trail and final balance. The fund can be used only for operation, maintenance, repair and replacement of common areas, and must be kept separate from other maintenance charges. The RWA must maintain proper accounts and get them audited by a chartered accountant.