IBBI seeks to streamline real estate insolvency regulations with focus on homebuyers

The Insolvency and Bankruptcy Board of India (IBBI) has released a discussion paper proposing reforms to streamline real estate insolvency regulations, with a focus on protecting homebuyers. Key proposals include ring-fencing project-wise cash flows, mandatory project-wise books of accounts, simplified claim forms for allottees, independent technical and cost-to-complete assessments, and enabling the Committee of Creditors to exclude solvent or unrelated projects from the corporate insolvency resolution process with a 66% vote share. The regulator has sought stakeholder comments by July 21, aiming to prioritize project completion over liquidation and align with the Supreme Court's observation in the Mansi Brar case favoring project-specific insolvency treatment.