Law Amendment Strengthens Homebuyers' Protection in Case of Realtor Bankruptcy: Assessing Your Property's Safety

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Disclaimer: This information is sourced from publicly available news and has been rewritten for general informational purposes only. Readers are encouraged to conduct their own research and seek professional advice before making any decisions based on the information provided.

Latest Amendment Protects Homebuyers' Interests in Insolvency Proceedings






In a recent move, the Insolvency and Bankruptcy Board of India (IBBI) has introduced a crucial amendment aimed at safeguarding the interests of homebuyers in case of insolvency and liquidation faced by promoters of housing projects.

According to the amendment, homebuyers' properties will be excluded from the liquidation process, granting them a significant role and protection. The amendment specifically states that if a corporate debtor has granted possession to a homebuyer in a real estate project, the property will not be considered part of the liquidation estate of the corporate debtor.

This amendment is a significant relief for homebuyers, reducing legal complexities and providing them with a voice in the liquidation proceedings.

Furthermore, the IBBI has advocated for a more prominent role for the Real Estate Regulatory Authority (RERA) by proposing mandatory registration of all real estate projects undergoing corporate insolvency resolution with the regulatory body. This move ensures that allottees of real estate projects have priority claims on the property.

The Amitabh Kant committee report on real estate projects has also emphasized the need for reform within the Insolvency and Bankruptcy Code (IBC) to better accommodate the intricacies of the real estate sector.

Through its notification dated February 12, the IBBI has introduced 12 key amendments to enhance overall liquidation regulations, aiming to streamline the process and enhance transparency in insolvency proceedings.





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