If you’re planning to buy a home, especially in Uttar Pradesh, this update could save you from future trouble.
RERA (Real Estate Regulatory Authority) has introduced new rules to stop builders from misusing the maintenance security money collected from homebuyers.
Many builders collect lakhs of rupees as Interest-Free Maintenance Security (IFMS) during the purchase of a flat. In many cases, buyers never get a clear record of how this money is used.
The new RERA rules aim to change that by making the entire process more transparent and secure.
Builders Can No Longer Keep the Money in Their Own Accounts
Under the new rules, builders cannot keep maintenance security funds in their personal or regular business accounts.
Instead, they must open a separate bank account and place the money in a fixed deposit (FD) with the bank offering the highest interest rate. This will keep buyers’ money safe while also earning interest until it is transferred.
Fixed Maintenance Charges for Different Properties
RERA has also fixed maintenance security charges based on the type of property.
Multi-storey residential flats: ₹20 to ₹100 per sq. ft.
Commercial shops (without central AC): ₹40 per sq. ft.
Commercial shops (with central AC): ₹50 per sq. ft.
This ensures builders cannot charge maintenance security arbitrarily.
Full Account of Every Rupee Is Now Mandatory
Once the builder hands over the society’s common areas, such as parks, lifts, and clubhouses, to the Residents’ Welfare Association (RWA) or Apartment Owners’ Association (AOA), the entire maintenance security amount, along with the interest earned, must be transferred to the association.
Builders will also have to provide a complete written statement showing how much money was collected from each homebuyer and how it was used.
Maintenance Money Cannot Be Misused
The new rules clearly state that maintenance security funds cannot be used for general day-to-day expenses.
This money can only be spent on major repairs or replacement of common facilities like elevators, generators, parks, and other shared infrastructure within the society.
Annual Audit Is Now Compulsory
To improve transparency, the RWA or AOA must get the maintenance fund audited every year by a Chartered Accountant (CA).
The audit report must also be presented to residents during the society’s Annual General Meeting (AGM) within three months, ensuring everyone knows how the money has been managed.
Where Has This Rule Been Implemented?
At present, these new maintenance security rules have been implemented in Uttar Pradesh.
The main objective is to protect homebuyers’ money, improve transparency, and ensure builders remain accountable. If you’re planning to buy a home in Uttar Pradesh, these new RERA rules offer an added layer of financial protection.
