According to those who know the situation, India intends to implement new regulations for managing bankruptcy cases involving real estate that will benefit homeowners even while their builders shut down.
The persons, who asked to remain anonymous since the material is private, stated that the planned amendment to the country’s Insolvency and Bankruptcy Code would allow the new regulations of the cases on a project-by-project basis. According to them, this will allow finished flats to be delivered to homebuyers even as the developer’s bankruptcy procedure is ongoing.
The corporate affairs ministry’s spokeswoman declined to comment.
Over the years, the Indian real estate market has seen a number of builders go out of business, leaving customers in a difficult situation owing to the uncertainty of the completion and delivery of the homes in which their life savings were invested. The completion of all of the developer’s unfinished projects is halted by admission into the insolvency proceedings under the present rules.
Inderjit Singh Rao, the junior minister for corporate affairs, had informed the MPs in August that as of June this year, 436 of the 1,999 instances of corporate insolvency still pending were in the real estate industry. A unique framework is required to address the intricacies of the real estate industry because the IBC had limited success in quickly resolving such issues.
The government also intends to develop a unified platform for case registration, streamline pre-packaged resolution plans, and offer customizable options for managing operational and nonviable assets independently in order to speed up settlements, they claimed.