IFMS Meaning and Importance in Real Estate

IFMS MEANING AND IMPORTANCE IN REAL ESTATE

OVERVIE

The IFMS is a crucial financial component in real estate transactions that plays a major role in the long-term longevity and durability of residential properties. This special financial clause acts as a reserve for continuing upkeep and common area costs inside a development. It is often collected at the time of property possession.

Examining the IFMS meaning in better detail reveals its significance and diverse influence on the real estate market. In this blog, we at L&T Realty explore the IFMS full form in real estate as well as its importance in real estate dealings.

REPAIRS AND MAINTENANCE

As the name suggests, one of the main purposes of IFMS is to fund the costs of any repairs and maintenance requirements for the common areas of the property

IMPROVEMENTS

USES OF IFMS

The IFMS can also be used for any improvements and developments to any infrastructure on the property that will be available to use for all the residents.

UTILITY ASPECTS

Another major aspect of IFMS is when it comes to the maintenance as well as the improvement of the property’s common utilities.

HOW IS IFMS CALCULATED A COLLECTED?

The calculation of the IFMS can vary in many ways, mostly depending on the developer as well as the residents’ welfare association. Currently, there is no standardized method that is used by all developers or associations when it comes to the calculation of the IFMS. However, it's worth remembering that, in most cases, the IFMS is calculated based on the total area of the property, which could also include the size of each resident’s home. It may also take into account a comparable portion of the amenities and facilities that are available on the property.

BENEFITS OF IFMS

SUSTAINABLE UPKEEP OF PROPERTY

One of the main benefits of IFMS is that it greatly helps in facilitating a sustainable way of maintaining the property, its common areas, amenities and utilities. It allows for consistent upkeep of the property which helps it maintain its appeal and also enhances its longevity.

MAINTAINS VALUE

Since the IFMS facilitates the consistent maintenance and even improvement of the property, it also helps in maintaining as well as improving the property’s overall value. On the other hand, without IFMS it's possible for the property to be neglected, causing it to depreciate drastically in value over time.

CHALLENGES FACED BY HOMEOWNERS

01 ACK OF TRANSPARENCY

IDEA OF UNFAIR FINANCIAL BURDEN

A common issue that occurs when it comes to IFMS is when homeowners may feel that they are paying for the improvements or upkeep of amenities or facilities that they do not use. This comes across as an unfair financial burden for them to take on, especially when others may be benefiting from a common amenity more than them.

The possibility of mismanagement of funds has made way for a potential lack of trust between homeowners and property management. This is why it's important to maintain a transparent system that reassures residents that their contributions are accounted for and being used for the right purposes.

03 INSUFFICIENT SERVICES

It is often the case for homeowners who have contributed to an IFMS to be unhappy or dissatisfied about the services that the IFMS funds have paid for, whether it be for repairs, maintenance or any improvement work.

02

LEGAL BASES

REAL ESTATE (REGULATION AND DEVELOPMENT) ACT, 2016

Section 11(4) (A) of the Real Estate (Regulation and Development) Act of 2016 states that,

“The promoter shall be responsible for all obligations, responsibilities and functions under the provisions of this Act or the rules and regulations made thereunder or to the allottees as per the agreement for sale, or to the association of allottees, as the case may be, till the conveyance of all the apartments, plots or buildings, as the case may be, to the allottees, or the common areas to the association of allottees or the competent authority, as the case may be: Provided that the responsibility of the promoter, with respect to the structural defect or any other defect for such period as is referred to in sub-section (3) of section 14, shall continue even after the conveyance deed of all the apartments, plots or buildings, as the case may be, to the allottees are executed.

CONCLUSION

In the end, it's clear to see the important benefits that an Interest free Maintenance System has to offer for residents of a property. While there are certainly some challenges and considerations to keep in mind, the system certainly provides more pros than it does cons.

With a more consistent and sustainable way of keeping a property in ideal condition while also not being too much of a financial strain on its residents, the IFMS is incredibly useful in the real estate world today.