Homebuyers get ‘Creditor’s Tag’
Homebuyers will get the status of financial creditors during the insolvency and bankruptcy court proceedings of the real estate companies, according to The Union Cabinet’s approval. The approval is for an ordinance to amend the insolvency law. This will make it easier for them to recover their investments in a housing project.
This move is aimed at classifying home buyers so that they can participate equitably in the insolvency resolution process under the Insolvency and Bankruptcy Code (IBC). There’s no description about the approval given yet by the officials but the sources said that the amendment effectively treats home buyers as financial creditors, and provides them enormous relief.
This would bring more transparency into the overall funding of the flat projects. There is an even stronger burden on developers to deliver on time, as home buyers are now getting the opportunity to claim their dues from builders.
It is certainly a major relief to thousands of homebuyers stuck in incomplete housing projects.