Insolvency relief for homebuyers soon

Separating troubled projects, early house registration proposed

- Gireesh Chandra Prasad & Rituraj Baruah

Homebuyers staring at uncertainty as the builder they trusted goes bankrupt may have relief at hand, with authorities weighing a series of measures to protect the vulnerable.

Ministries of housing and corporate affairs are working with the bankruptcy regulator to ease homebuyers' pain after a Supreme Court nudge in this direction, two people aware of the matter said. Among the proposals under consideration: Early registration of property in a buyer's name after 20% payment; project-specific insolvency resolution so only troubled projects-not entire developer groups-go into bankruptcy; stronger coordination between the bankruptcy regulator and state real estate regulatory authorities, and institutional reforms to ensure that stalled projects are revived.

The discussions between the government and the Insolvency and Bankruptcy Board of India (IBBI) are still at an early stage, the people said on the condition of anonymity.

The measures aim to bring relief for thousands of families, for whom a builder's bankruptcy means losing the home they paid for, while still juggling EMIs and rent. The discussions between the government and the Insolvency and Bankruptcy Board of India (IBBI) follow a 12 September Supreme Court ruling that declared the right to shelter a fundamental right under Article 21.