From mint · Banikinkar Pattanayak · · 1m 10s
Project-wise insolvency shields homebuyers from developer defaults
New rules let healthy real estate projects skip insolvency when developer fails elsewhere.
In brief
New rules let healthy real estate projects skip insolvency when developer fails elsewhere. IBBI regulations allow exclusion of financially sound projects from insolvency even when developer defaults. Originally reported by mint.
New insolvency rules for real estate
IBBI notified regulations enabling exclusion of healthy projects from insolvency when developer defaults elsewhere.
Why homebuyers need this
Homebuyers previously faced disruptions in maintenance and registration when developer defaults dragged all projects into insolvency.
Key project rules
Each project must have a separate bank account and comply with Rera fund utilization norms to prevent fund diversion.
What the rules require
Project-wise disclosures on units, inventory, approvals, dues, and litigations must be made under new regulations.
How homebuyers benefit
Healthy projects can continue construction and registration without moratorium while stressed projects face fund diversion checks.
Exclusion process
Committee of Creditors needs two-thirds majority to recommend exclusion of healthy projects from insolvency.
Current insolvency state
221 of 553 real estate cases in progress as of September 2025, involving 1,08,887 homebuyers.
The key point
IBBI regulations allow exclusion of financially sound projects from insolvency even when developer defaults.
