Homebuyers are stranded for years if the builder goes bankrupt. That changes now

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Subscribe to enjoy similar stories. Indian buyers who wait for their homes for years after a developer goes bankrupt have a reason to hope: they can now get their properties even as the case winds through courts.

The Insolvency and Bankruptcy Board of India (IBBI) has amended its regulations, allowing administrators of bankrupt real estate companies to hand over plots, apartments or buildings to owners even while the debt resolution process is still on. Owners, however, must have met the terms of their purchase contract and will need two-thirds of the lenders to the insolvent builder to agree, the IBBI said on Tuesday.

“Thus, the distressed homebuyers would not have to wait for long periods in order to get possession of their properties." The bankruptcy regulator’s decision will bring relief to thousands of homebuyers locked out their properties for years after lenders initiated insolvency action against stressed projects. As of September 2024, only 160 cases of distressed builders stood resolved out of 1,760 admitted, according to IBBI data.

IBBI also allowed large groups of homebuyers to appoint ‘facilitators’ for attending crucial lender meetings to ensure their effective participation in debt resolution. Creditor meetings can also have representatives of land agencies such as the New Okhla Industrial Development Authority (Noida) and the Haryana Urban Development Authority (Huda), said the regulator, citing its latest Insolvency Resolution Process for Corporate Persons (Amendment) Regulations, 2025.

Participation of land authorities would not only enhance the viability and feasibility of resolution plans but also build confidence among homebuyers and other stakeholders, the IBBI said. “The proposed regime would now