The Insolvency and Bankruptcy Board of India (IBBI) has amended insolvency rules for stressed real estate developers to facilitate home delivery, strengthen homebuyers’ participation, and enable project-wise treatment while reducing information asymmetry.
IBBI notified the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) (Fifth Amendment) Regulations, 2026, on October 30. The amendments seek to promote viable resolution of real estate projects, enhance transparency and accountability, and protect the interests of homebuyers and other stakeholders in the corporate insolvency resolution process (CIRP), the board said in an October 31 press release.
The amendments follow a June discussion paper addressing the “unique challenges that affect a large number of homebuyers whose primary expectation is completion and delivery of homes rather than financial recovery”.
According to a committee report submitted to the board earlier this year, 221 of the 553 admitted real estate cases were still ongoing as of September 30, 2025. These cases involved approximately 108,887 homebuyers, nearly half of the total homebuyer population in the Insolvency and Bankruptcy Code (IBC) real estate insolvency system.
The report noted that many ongoing cases had been pending for multiple years, reflecting the complexity of real estate insolvencies and procedural delays in the adjudicatory system.
Under the insolvency process, a resolution professional (RP) manages the corporate debtor’s affairs and conducts the resolution process within the framework of decisions and approvals of the Committee of Creditors (CoC). The CoC comprises financial creditors, including lenders and homebuyers represented as a class through an authorised representative (AR).
To expedite the handover of completed units, the new rules clarify that the CoC can approve buyers’ requests for possession of plots, apartments or buildings and facilitate registration under Regulation 4E. Alongside individual approvals, the CoC can grant in-principle approval authorising the RP to process such requests as and when received during CIRP, avoiding the need to seek fresh approval for every homebuyer.
If a developer has multiple projects, the CoC can now recommend the exclusion of individual projects from the resolution process. The RP must place project-wise details before the CoC at its first meeting, including Real Estate (Regulation and Development) Act, 2016 (RERA) registration, completion stage, possession and occupancy status, and completed and incomplete units. Based on this, the CoC can, with at least 66 per cent voting share and recorded reasons, recommend to the Adjudicating Authority (AA) that any project be excluded from CIRP. The RP must then file an application before the AA, which will consider the recommendation.
The amendments also intend to strengthen homebuyers’ voices by making their ARs’ role more transparent. The public announcement must offer creditors in a class a choice of three insolvency professionals identified under Regulation 4A to act as their ARs, along with links to brief profiles and details of their roles and duties.
Further, ARs must submit minutes of their meetings with creditors in the class to the RP for placement before the CoC at its next meeting, and CoC minutes must record the views, concerns and opinions expressed by ARs on behalf of the class.
According to the new rules, the monitoring committee overseeing plan implementation must include the AR or another allottee representative chosen by majority vote, alongside a representative of the concerned Real Estate Regulatory Authority and, wherever applicable, a representative of the competent authority, subject to their agreement to join the committee. Their participation is intended to help address approvals, compliance and construction milestones.
To tighten financial discipline, the amendment retains the existing requirement, introduced in February 2024, for a separate bank account for each real estate project. It also requires the interim resolution professional or RP to place project-wise statements of receipts and payments and other financial information before the CoC at intervals considered appropriate by it, while ensuring compliance with RERA fund-utilisation requirements.
Before issuing the invitation for expression of interest, the RP must, with prior CoC approval, appoint one or more suitably qualified and independent professionals to conduct a project-wise technical and cost-to-complete assessment and obtain the assessment before issuing the invitation. It must cover construction progress, approvals, inventory, estimated completion costs, funding requirements, realistic timelines and risks.
The assessment must form part of the information memorandum (IM), which helps prospective resolution applicants formulate resolution plans. Additionally, the IM must disclose project-wise unit and inventory details, construction progress, common areas and amenities, permissible development area, approvals and their status, encumbrances and lender-wise charges, litigation, statutory dues, regulatory proceedings, penalties, complaints and RERA bank-account balances, among other details.
The memorandum must also identify allottees appearing in the developer’s books or RERA records who have not submitted claims, including their names, amounts due and units allotted. Homebuyers’ preferences for possession, conveyance, registration or transfer of title, refunds or other relief, and the number of allottees indicating each preference or no preference, must also be disclosed.
Notably, resolution plans must detail sanctioned, constructed and under-construction units, with sold and unsold inventory shown separately. They must specify the treatment of allottee claims, including through possession, execution of conveyance deeds, registration or transfer of title, refunds or other means.
Resolution plans must also provide for the treatment of non-filing homebuyers listed in the memorandum, specify project-wise, phase-wise or tower-wise timelines for completion and delivery of possession, as applicable, and provide for periodic progress reports to the monitoring committee.
The rules also require the RP to continue discharging responsibilities under the resolution process until the adjudicating authority decides on a withdrawal application under Section 12A of the IBC. Confidentiality requirements now also cover valuation reports, alongside fair value and liquidation value.
