If your builder is in insolvency proceedings, your position and options change. General legal information only.
Homebuyers as financial creditors
The IBC treats allottees who paid for real estate projects as financial creditors, so they can take part in the committee of creditors. Amendments also set a threshold for allottees to start a process against a developer, linked to a minimum number or percentage of allottees in the same project. Check the current threshold.
What happens to your flat?
- The moratorium stops most proceedings against the builder, which can affect pending RERA and consumer cases.
- The resolution professional manages the company and the project and invites resolution plans.
- A plan may provide for completion of the project and delivery to allottees.
What you should do
- Submit your claim to the resolution professional by the deadline in the public announcement, with the agreement, receipts and proof of payment.
- Keep track of the committee of creditors’ meetings and votes.
- Do not stop paying lenders under tripartite loan arrangements without advice.
- Coordinate with other allottees in the same project through an association.
Choosing remedies
Whether to pursue RERA, a consumer case or the IBC depends on the builder’s finances and the project stage. Take advice before filing. See the RERA complaint guide.
Related: Insolvency and IBC · All insolvency guides · Send an enquiry
Important disclaimer: This article is general legal information, not legal advice. It does not create a lawyer-client relationship and is not an advertisement or solicitation under Bar Council of India rules. Verify current statutes, rules and judgments before relying on it.
