Insolvency and Bankruptcy Board of India (IBBI)
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The Insolvency and Bankruptcy Board of India (IBBI) has put forward five proposals to offer much-needed relief to homebuyers who have been awaiting possession of their homes for years. These measures aim to expedite the resolution process for stalled real estate projects and protect the rights of innocent homebuyers.

One key proposal is to exclude properties in the possession of homebuyers from the liquidation process, providing assurance to those who have already received possession of their units. Another significant step is the mandatory registration of projects with the Real Estate Regulatory Authority (RERA), promoting transparency and efficiency in the real estate sector.

Additionally, the IBBI suggests the operation of separate bank accounts for each real estate project, ensuring greater financial transparency. The proposal also advocates executing registration and sublease deeds with the approval of the Committee of Creditors (CoC) during the resolution process. This move would allow the CoC to examine and invite separate plans for each project, facilitating flexibility and competition.

Moreover, the Resolution Professional (RP) may invite separate resolution plans for each real estate project, addressing the fact that some resolution applicants may be interested in specific projects rather than all. This approach is expected to maximize value and expedite resolution.

One notable change is the RP’s ability to transfer the property to allottees during the resolution process with CoC’s approval. This move eliminates ambiguity regarding asset transfers during the moratorium.

The proposal also encourages project-specific resolutions, considering that different projects may be in various stages of development or located in different regions. This will enable developers to focus on projects within their expertise and jurisdiction, further improving outcomes for all stakeholders.

The IBBI’s proposals are well-received by legal experts, as they are intended to streamline the insolvency process for real estate companies while safeguarding the interests of homebuyers. These changes could bring greater clarity, efficiency, and fairness to the resolution of stalled real estate projects, benefiting both homebuyers and the industry as a whole.

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