February 7, 2025 - The Insolvency and Bankruptcy Board of India (IBBI) has provided significant relief to homebuyers through a rule change which says that even if a builder is bankrupt or a bankruptcy process is underway for a project, possession of the flat, plot, apartment or building can still be taken. This will ensure that people do not face delays in getting possession of their property.

IBBI has said this change in rules will allow the project to continue during the Corporate Insolvency Resolution Process (CIRP), and buyers will be able to take possession of their homes. This change specifically concerns the process of possession transfer and will not affect the bankruptcy process itself. Previously, creditors (lenders) had more influence in the bankruptcy process, but now homebuyers will also be considered an important party. This will make buyers feel more secure regarding their property.

The MSME (Micro, Small, and Medium Enterprises) status of corporate defaulters will now be made public. This will allow more people to participate in the projects and give them access to benefits associated with MSME.

Facilitators will now be appointed for buyers. This will ensure better communication between the buyers and the insolvency process. Buyers will receive necessary information from time to time and will be helped in making decisions.

Government agencies will be allowed to participate in the Circle of Creditors' meetings. This will ensure the project is being carried out in compliance with the regulations.

The Resolution Professional will be required to submit a report within 60 days of the insolvency process beginning. This report will outline the approvals received for the project, ensuring that the project is completed on time.

Buyers and their associations can participate as Resolution Applicants. If no external developer shows interest in the project, homebuyers can attempt to complete the project themselves.

Source: Media Reports