News: UP RERA: IFMS Funds in Separate Account, Handed to RWAs-15-07-2026
The Uttar Pradesh Real Estate Regulatory Authority (UP RERA) has laid down new rules for collecting, managing and transferring Interest Free Maintenance Security (IFMS) funds, with the aim of cutting disputes over maintenance money. Developers must hold the amount in a separate bank account and pass the entire corpus, with accrued interest, to the Residents’ Welfare Association (RWA) or Association of Allottees when the project’s common areas are handed over.
The changes were notified under the 12th Amendment to the Uttar Pradesh Real Estate Regulatory Authority (General) Regulations, 2019, and took effect on publication on UP RERA’s website on July 15, the regulator said in a statement.
Promoters may collect IFMS from allottees at the time of registration of the sale, lease or sub-lease deed. The money must go into a designated account with a scheduled bank and then be placed in the fixed deposit offering the highest interest rate among eligible banks, after quotations are obtained.
At handover, promoters must also give a detailed transfer statement showing unit-wise collections, expenditure incurred, the audit trail and the final balance transferred.
The corpus may be used only for operation, maintenance, repair and replacement of common areas, equipment and shared services. It has to be kept in a separate account, apart from regular monthly maintenance charges. The RWA or Association of Allottees must maintain accounts of receipts, payments and utilisation, have them audited by a chartered accountant and place the audit report before the Annual General Meeting or Extraordinary General Body Meeting within three months of completion.
The regulations prescribe rates by project type. Group housing projects are set at Rs 20-Rs 100 per sq ft depending on the category of residential units. Commercial projects are set at Rs 40 per sq ft for non-central air-conditioned buildings and Rs 50 per sq ft for centrally air-conditioned ones. Separate rates apply to plotted residential and commercial developments.
IFMS is a one-time, interest-free deposit that homebuyers pay the developer, typically at possession, as a long-term maintenance reserve for the society. It has often led to disputes, with RWAs alleging delayed transfers, lack of transparency and disagreement over the amount due.
UP RERA Chairman Sanjay R. Bhoosreddy said the amendment is meant to bring transparency, accountability and financial discipline. Buyers contribute the money for long-term upkeep of common facilities, he said, so the corpus must stay secure and be used only for that purpose. He added that the reform will strengthen RWAs and support better maintenance of projects across Uttar Pradesh.
