Insolvency And Bankruptcy Code (IBC) – A Boon For Homebuyers
The Government of India has recently amended the Insolvency and Bankruptcy Code (IBC) 2016 as an effort to safeguard the rights and interests of homebuyers, and to put them on the same footing as the other stakeholders in a real estate project. This initiative on the part of the government has come as a blessing for homebuyers, who were until now getting the shorter end of the stick with numerous glitches and delays in real estate processes and transactions.
As per the latest amendment to the IBC, homebuyers have been given the status of “financial creditor”. This amendment has been made in view of the fact that homebuyers raise money as a means to finance the construction of the project, and thus they should be treated as any other financial creditor.
Benefits to the homebuyer
There are many ways in which homebuyers stand to benefit by their ascendance to the status of “financial creditor”. For one, this will help homebuyers who are affected because of incomplete or abandoned real estate projects by spurious developers. Nearly 30 per cent of real estate projects in India are delayed due to various reasons, a common one being that the developer is in a debt trap. This affects homebuyers in severe ways, as they have put their life savings towards this project and continue to pay the EMI with no sign of completion of the project.
With this amendment in the IBC, the homebuyer as financial creditor has the right to invoke Section 7 of the IBC against an errant developer. Homebuyers can now file an application seeking resolution for insolvency under the Corporate Insolvency Resolution Process (CIRP). As a result of this amendment, homebuyers can also expect fast tracking of pending court cases against leading real estate groups.
After the implementation of RERA last year, the government has taken yet another important step to safeguard the rights and interests of homebuyers. With this added layer of security, making home purchases has become a safer and better prospect.
Buying a home with Kolte-Patil Developers is a reliable and hassle-free process. Kolte-Patil delivers quality homes, on time, every time. Looking to invest in a residential apartment in Wagholi? Explore 3 RLK apartments in Pune’s most sought-after investment destination, Wagholi, at Kolte-Patil’s Ivy Estate (The project has been registered via MahaRERA registration number P52100001066).