UP RERA modifies IFMS rules; here's what homebuyers should know

The Uttar Pradesh Real Estate Regulatory Authority (UP RERA) has modified the rules about Interest Free Maintenance Security (IFMS). Primarily, the amendments relate to how the IFMS corpus will be held and managed going forward, with clear specifications about its transfer and audit.

With the regulatory guidelines now in place in respect of IFMS, developers will not be able to misuse or mix this corpus with other project funds. Further, homebuyers will be in a better position as the corpus is now intended to be invested in high-interest-yielding fixed deposits.

IFMS is a one-time, refundable deposit that the developer collects from homebuyers and pools as a common ‘corpus’ for maintenance of the project’s common amenities in the future. The deposit does not earn any interest for the homebuyer.

Primarily, the corpus is aggregated for the long-term upkeep and maintenance of various common amenities, including lifts, security systems, common lighting, water infrastructure, clubs and other shared amenities.

The amendment relates to the collection, management, transfer and utilization of IFMS. Accordingly, the IFMS amount should be collected based on the cost of maintenance requirements depending on the scale, specifications and target segment of the projects. Every rupee should be deposited in a separate designated bank account opened with any scheduled bank.

Further, this corpus should be invested in the highest interest-bearing fixed deposit, added the notification. This implies that this money aggregated towards IFMS can no longer remain idle. Instead, promoters must identify the bank offering the highest FD rate and channelise these funds into it for better return for homebuyers.

The entire IFMS corpus is required to be transferred by the promoter or builder to the RWA. The promoter shall be required to provide a Transfer Statement, including details of total IFMS amount collected from the allottees with unit-wise break-up of such amounts, any deductions or adjustments made, audit trail supported by documentation for expenditures incurred from the IFMS and total amount being transferred to the Association, the amendment added.

The funds have to be strictly utilised towards maintenance, repair and replacement of common areas, equipment and services meant for collective benefit of the residents. According to the latest notification, proper books of account have to be maintained, reflecting all receipts, payments and utilisation of IFMS amount. Besides, IFMS funds’ utilisation has to be audited by a Chartered Accountant in accordance with generally accepted accounting principles.

The amendment to this effect was notified on July 13, 2026, and has been in force since its publication on the Authority’s website.