Buyers in possession should get ownership of flat: IBBI
Bankruptcy Board of India (IBBI) has proposed the transfer of the ownership of a plot or flat to buyers who owe no dues and are already in possession of the property during the bankruptcy resolution of the stressed real estate firm, subject to the approval of the committee of creditors (CoC).
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If adopted, the move, suggested by the regulator in a discussion paper on Thursday, can potentially benefit thousands of homebuyers threatened with the prospect of a prolonged delay in the registration of their flats, experts said.
The CoC in case of an insolvent realty firm is usually dominated by homebuyers, as they have the status of financial creditors.
The IBBI also suggested that resolution professionals be allowed by the CoC to «hand over the possession of units to the allottees on 'as is where is' basis or on payment of balance amount, if any, after taking into account the funds due and funds required for completing the unit». The idea is to «expedite the resolution process and avoid delays due to unnecessary holds-ups», the regulator said.
«Land ownership and possession is a crucial issue in case of real estate projects and streamlining the handover process is a long-awaited reform, which will go a long way in improving the resolution process,» said Jyoti Prakash Gadia, managing director, Resurgent India.
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