• IFMS collection by builder

Ours is a residential colony in Jaipur with 1550 plots and villas.
Project was launched in 2005 with promised facilities like, state of art club, landscaping, greenery, 24X7 security, sewerage treatment plant, water supply through pipe lines, hospital, primary schools, senior secondary school and much more.
But even after 14 years of its launching following developments and facilities are still pending and completion certificate is not yet obtained by the builder.
1.	No club, Hospital, schools and Sewer treatment plants.
2.	No landscaping and greenery, park areas are marked but not developed, it is only a barren land without any greenery and plantation.
3.	Water supply machineries still not developed/installed and water is being supplied through tankers
4.	Roads made initially with very poor quality and all of them are damaged and not usable. 
Builder sold 95% properties by year 2012. Due to lack of promised facilities, so far only 60 families shifted to live.
Now builder is not maintaining the colony, it is providing only street lights in areas where people are living so connecting roads are in dark and water through tankers. Following facilities are not being provided.
1.	No housekeeping / cleaning of common areas
2.	Nil security. No guards at all.
3.	No horticulture staff to maintain plantation done initially on road sides, they are getting dried up.
4.	Altogether it is not livable so property owners are shying away to construct and shift to live.
Meantime in year 2015 residents joined together to form a registered residents welfare society (RWA). Since its inception RWA had been writing to builder for completing pending developments. And provide proper maintenance so that residents feel like shifting to live in colony. But none of the correspondence is responded by builder.
This is the scenario about maintenance.
1.	Builder has collected IFMS @ Rs. 20,000/- per property amounting to a total of Rs. 3,10,00,000/- (three crores ten lakhs)
2.	Only two services namely street light and water costing around rupees one lakh per month are being provided by builder.
3.	Whereas if we calculate the interest on IFMS on its collective principal it comes around Rs. 2.5 Lakhs per month.
Please advise 
1.	What is the purpose of IFMS ( Interest free maintenance security)
2.	If the period of completion of project has gone too long as in our case it is 14 years since launching, and the money collected as IFMS is kept by builder. Is there any legal binding on builder to keep this fund in bank and use the interest earned for the maintenance of project?
3.	What is meant by term Interest free, 
(a)	Does it mean builder can earn the interest on fund collected under the head of IFMS. And use it for some other purpose as per his choice but never for the maintenance of area from where it was collected.
(b)	Or it means the individual who paid IFMS has no right to claim interest but any earning on collective fund under the head of IFMS has to be u
Asked 2 years ago in Property Law
Religion: Hindu

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16 Answers

1. Interest free maintenance security means the maintenance amount collected by builder for security wherein he won't pay maintenance to the members.

2. The RWA can file a class action on behalf of all residents a consumer complaint against builder to complete all the amenities and provide compensation for delay, they can also ask builder to complete the amenities and handover maintenance and the corpus fund to RAW. A individual complaint can be also filed seeking compensation for delay and completion of promised amenities. 

3. a. No builder cannot use the interest for other work the amount shall be utilised in maintenance only.

b. Yes the individual cannot claim interest from the builder that is meaning of IMFS.

Shubham Jhajharia
Advocate, Ahmedabad
25518 Answers
148 Consultations

5.0 on 5.0

It is not binding on builder to deposit IFMS in bank  and use interest earned for maintenance 

 

2) builder can earn interest on fund collected but should use it for maintenance 

 

3) if builder has failed to develop amenities file complaint against builder before consumer forum and seek orders to direct builder to provide  amenities provided as mentioned in brochure/ sale deed within stipulated period of 6 months or so 

 

4) also seek litigation costs and compensation for mental torture undergone by you 

Ajay Sethi
Advocate, Mumbai
84381 Answers
5530 Consultations

5.0 on 5.0

IFMS is collected from the property owners by  developer to provide emergency fund for installing the services in case of need to improve the services and to replace the machine and equipment in this regard as resident welfare Association has already been it will be a good idea to increase pressure to get the Corpus so collected for the use of this society anti essential services which is promised in the cell brochure by the developer to be completed by him and priority basis and the Builder should be forced by filing case against him in the High Court the state Commission for Consumer Protection will not be an idea to go for that's why I am advising to go to High Court and file writ petition in this regard the resident welfare Association should collect the regular maintenance charges from the property owners and as soon as they collect the IFMS money that may be invested for earning interest and that interest can be used for maintenance so that the prices is collections in the cost of services can be minimised and managed 

 normally the developer do not refund the IFMS  so collected to the resident welfare Association and continuous process be applied to get the money because this is interest free maintenance security so builder is not going to pay you any interest amount and the Corpus fund but the primary objective should be to get the principal amount from the builder

 

Vimlesh Prasad Mishra
Advocate, Lucknow
6829 Answers
23 Consultations

4.9 on 5.0

1) You can make complaints in RERA and Consumer Forum of your city. In complaints mentioned all above points step by step date wise.

 

2) You are entitled to get money back along with interest if builder has not provided possession and facilities on time.

Ganesh Kadam
Advocate, Pune
12202 Answers
154 Consultations

4.9 on 5.0

You can go before consumer court for deficiency of service. They will pass necessary orders

Prashant Nayak
Advocate, Mumbai
24476 Answers
52 Consultations

4.4 on 5.0

1. The delay of 14 years is inordinate and can not be excused on any reason.

2. So you have the option of coming out of the project unless the deed of sale is already registered and you are in possession of the property.

3. If not then you can file a case before the consumer forum seeking full refund, interest and damages and compensation. 

4. You can also seek damages even after registration of the property if the developer has failed provide the services promised by it.

Devajyoti Barman
Advocate, Kolkata
22515 Answers
364 Consultations

5.0 on 5.0

At the time of possession of commercial or residential properties, buyers are generally liable to pay a number of extra ‘burdens’ known as additional charges. One of the significant among them is the IFMS (Interest Free Maintenance Security) charges. IFMS is a collective sum of money levied from the buyers/investors of a residential/commercial project by the builder, under a separate account.

The builder will keep the money under their custody, till a RWA (Residential Welfare Association) is enacted in the residential project, following which the builder will transfer the account to the association. However the interest for the money will not be passed to the association and will be in favour to the buyers. Mostly, RWA’s will be set up at least a year after the project is delivered.

IFMS is mandatory when you purchase home and is collected for the benefit of the residents itself. The money is reserved for the unprecedented or planned maintenances that might incur for the project in the future like lift failure, park development, security enhancement or any other building maintenance works. IFMS is also ideally charged to curb the disputes between the flat owners.

IFMS is higher for commercial projects and relatively low for residential projects. Generally, Rs 25 to 50 per sq ft is being charged as IFMS for residential projects and Rs 50 to 60 per sq ft for commercial projects in Delhi-NCR. The commercial projects will be maintained by the builder or any authorized authorities appointed by the builder.

Mohammed Mujeeb
Advocate, Hyderabad
19012 Answers
30 Consultations

4.5 on 5.0

Dear client,

Don't you think, you have delayed a lot to raise this issue otherwise you had perfect remedy throuhgh consumer court and compensation for delayed possession and failure to provide promised amenities.

20,000 IMFs is less otherwise it would be more if paid every month but builder acted smart and now enjoying interest .

What are terms of BBA ? 

Yogendra Singh Rajawat
Advocate, Jaipur
21442 Answers
31 Consultations

4.4 on 5.0

Hi, 

You are suggested to sue the builder and take the money back. IFMS means that the owners are not authorised for interest on that fund. 

Ganesh Singh
Advocate, New Delhi
6629 Answers
16 Consultations

4.5 on 5.0

This seems to be a very serious matter. A legal notice should be sent to the builder and in case he does not respond then file a complaint against him in the RERA tribunal.

Regards 

Rahul Mishra
Advocate, Lucknow
13117 Answers
46 Consultations

5.0 on 5.0

The builder is reported to have committed deficiency in service in all aspects.

He is liable to be prosecuted for this through consumer forum.

You can issue a legal notice by registered post through RWA  demanding the immediate fulfillment of the deficient items that are still incomplete and await his reply or compliance.

After that you may approach consumer forum with a complaint abut this and seek compensation including the relief  and remedy. 

T Kalaiselvan
Advocate, Vellore
74484 Answers
1226 Consultations

5.0 on 5.0

  1. As per the information mentioned in the present query, makes it clear that the builder has breached the contract.
  2. As you all have been writing to him through the registered RWA in the form of a representation to get the facilities.
  3. Using the same written requests, you should approach the civil court of law to get the amenities as promised in the contract or get the money back with interest.
  4. Why I am saying to not to approach the consumer forum as there may be the issue of limitation, but in civil suit it can be taken care off.

Sanjay Baniwal
Advocate, South Delhi
5464 Answers
13 Consultations

5.0 on 5.0

All the aforesaid issues can be prayed in your consumer complaint filed before forum

Prashant Nayak
Advocate, Mumbai
24476 Answers
52 Consultations

4.4 on 5.0

1) you can issue notice to builder to hand over maintenance to society 

 

2) if builder refuses file complaint against builder before consumer forum and seek orders to direct builder to furnish audited accounts and handover maintenance to the society 

 

3) you can enter into any arrangement with builder for resolution of disputes 

Ajay Sethi
Advocate, Mumbai
84381 Answers
5530 Consultations

5.0 on 5.0

1. For hand over of society and funds a suit can be filed.by the society against the builder.

2. Yes in suit you can claim same.

3. Yes a MOU for same can be made with builder and every member even living in flat or not has to pay maintenance.

Shubham Jhajharia
Advocate, Ahmedabad
25518 Answers
148 Consultations

5.0 on 5.0

1. You can discuss among the members and decide on it.

2. Once a society is formed then as a body, it can file a consumer case against the builder which will be more effective.

3. Once a society is formed than why should you again depend on the builder for maintenance. 

Let the new buyers become members after they buy the properties.

You all can decide about this in a meeting also but you only have to provide the agreement drafted to the builder on all such further issues as discussed.

 

 

T Kalaiselvan
Advocate, Vellore
74484 Answers
1226 Consultations

5.0 on 5.0

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