If you’re planning to buy a home in Uttar Pradesh, there’s good news.
The Real Estate Regulatory Authority (RERA) has introduced new rules to protect homebuyers from misuse of Interest-Free Maintenance Security (IFMS) funds collected by builders.
Many builders collect lakhs of rupees from buyers as maintenance security but fail to maintain proper records or transparency.
Under the new rules, builders will now have to follow strict guidelines on how this money is handled and used.
Builders Can No Longer Keep Maintenance Funds in Personal Accounts
Under the new RERA rules, builders will no longer be allowed to keep maintenance security money in their personal or current bank accounts.
Instead, they must:
Open a separate bank account for the maintenance fund.
Invest the money in a fixed deposit (FD) with the bank offering the highest interest rate.
This will help keep buyers’ money safe while allowing it to earn interest until it is transferred to the residents.
Fixed Maintenance Charges Based on Property Type
RERA has also fixed the maintenance security amount that builders can collect based on the type of property.
| Property Type | Maintenance Security Rate |
|---|---|
| Multi-storey residential flats | Rs 20 to Rs 100 per sq. ft. |
| Commercial shops (Non-AC) | Rs 40 per sq. ft. |
| Commercial shops (Central AC) | Rs 50 per sq. ft. |
These fixed rates are expected to bring more transparency and prevent arbitrary charges.
Builders Must Give a Complete Account of the Money
Once the common facilities of a housing society—such as parks, lifts, clubhouses, and other shared areas—are handed over to the Residents’ Welfare Association (RWA) or Apartment Owners Association (AOA), the builder must transfer the entire maintenance fund along with the interest earned.
The builder will also have to provide a detailed written statement showing:
How much maintenance money was collected from each homebuyer.
How much money was spent.
The remaining balance, including interest.
Maintenance Money Cannot Be Used for Other Expenses
The new rules clearly state that builders cannot use maintenance security funds for routine day-to-day expenses.
The money can only be used for major repairs or replacement of common facilities, including:
Lifts
Parks
Generators
Other major shared infrastructure
This ensures that the fund remains available for long-term maintenance needs.
Annual Audit Made Mandatory
To improve transparency, the RWA or AOA must now get the maintenance fund audited every year by a Chartered Accountant (CA).
The audit report must be presented before residents during the society’s Annual General Meeting (AGM) within three months of its completion.
This will help residents keep track of how their money is being managed.
Where Has This Rule Been Implemented?
At present, these new maintenance security rules have been implemented in Uttar Pradesh.
The move is aimed at protecting homebuyers’ money, increasing transparency, and ensuring builders remain accountable for every rupee collected as maintenance security.
For anyone planning to buy a home in the state, these rules provide an added layer of financial security and peace of mind.
