IBBI tightens rules for stressed real estate projects

To expedite real estate insolvencies, regulator the Insolvency and Bankruptcy Board of India (IBBI) has notified amendments to regulations providing for project-wise treatment, enhanced disclosures, stronger participation of homebuyers as well as detailed cost-assessment that will help attract more realistic bids.
Against the backdrop of issues, challenges and delays being faced in the resolution of stressed real estate projects that are impacting homebuyers, the watchdog has amended the regulations pertaining to insolvency resolution process for corporate persons.
IBBI is a key institution in implementing the Insolvency and Bankruptcy Code (IBC), which provides the framework for resolution of stressed assets in a market-linked and time-bound manner.
"The amendments aim to facilitate more informed and viable resolution of real estate projects, enhance transparency and accountability, and strengthen the interests of homebuyers and other stakeholders in the insolvency resolution process," IBBI said in a release on Saturday.
With the changes in regulations, IBBI seeks to strengthen project-wise financial management and monitoring, introduce technical and cost-to-complete assessment of real estate projects, and enhance disclosures relating to the projects.
Besides, the amendments aim to boost the participation of homebuyers as well as strengthen oversight during the insolvency resolution process and also provide for prescribing project-wise requirements in the resolution plan.
According to IBBI, the amended norms would facilitate identification and exclusion of real estate projects under the resolution process as well as facilitate handover of possession to homebuyers.
Certain other changes have also been effected for procedural improvements.
Under IBC, a Resolution Professional or an Interim Resolution Professional (IRP) handles the insolvency process and a decision on the resolution plan is taken by the Committee of Creditors (CoC). The plan needs to be approved by the National Company Law Tribunal (NCLT), which is the Adjudicating Authority. - PTI