India’s insolvency regulator (IBBI) has tightened rules for real estate companies undergoing insolvency to give priority to project completion and home delivery. The new rules require independent project assessments, clear delivery timelines and stronger homebuyer participation in the resolution process.
The changes were notified on October 30 under the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) (Fifth Amendment) Regulations, 2026. They aim to reduce uncertainty for homebuyers and make resolution plans more practical.
The rules apply when a real estate developer enters the corporate insolvency resolution process (CIRP). They focus on project-wise assessment, funding needs, buyer claims and monitoring of the approved plan.
What The New Rules Require
Under the amended rules, an independent professional must assess each real estate project before expressions of interest are invited from potential bidders. The assessment must cover the construction status, pending approvals, funding requirement and completion risks.
It must also include realistic timelines for completion and delivery. This means a resolution plan cannot remain vague about when homes will be handed over.
Key requirements include:
- Independent assessment of construction progress
- Assessment of pending approvals and funding needs
- Identification of completion risks
- Realistic completion and delivery timelines
- Project-wise, phase-wise or tower-wise possession schedules
- Periodic progress reporting
- Clear treatment of homebuyer claims
- Homebuyer representation on monitoring committees
The amendment also allows creditors holding at least 66% voting share to recommend excluding a specific project from insolvency. The resolution professional must then apply to the adjudicating authority, which will consider the request.
How Homebuyers Will Benefit
The biggest change is better oversight for homebuyers. Resolution plans must clearly state how buyer claims will be handled. They can provide possession, title transfer, refunds or other suitable arrangements.
The plans must also cover buyers whose claims were not submitted but are included in the information memorandum. This is important because many allottees may not file claims during insolvency due to lack of awareness.
Homebuyers will also get representation on monitoring committees that oversee plan implementation. RERA and competent-authority representatives may join these committees where applicable, subject to their agreement.
The changes are summarised below:
| Area | Earlier Challenge | New Provision |
| Project assessment | Limited project-level clarity | Mandatory independent assessment |
| Delivery timelines | Often vague | Realistic timelines required |
| Buyer claims | Some buyers left out | Unsubmitted claims addressed in plan |
| Possession requests | Separate decisions needed | In-principle approval allowed |
| Monitoring | Limited buyer role | Homebuyer representation on committees |
| Project exclusion | No clear route | 66% creditors can recommend exclusion |
Faster Possession During Insolvency
The new rules also make it easier to handle possession and registration requests during insolvency. Creditors can grant “in-principle approval” for eligible requests. This avoids the need for a separate decision for every buyer.
This could speed up handover in projects where a large number of units are already complete. It may also reduce legal delays for buyers who only need possession or registration.
Earlier, IBBI had introduced a mechanism under Regulation 4E to enable handover of possession to willing allottees where substantial units in a project were complete. The new amendment builds on that approach by making delivery timelines and monitoring more structured.
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Why The Reform Matters
Real estate insolvency cases often involve thousands of homebuyers. Many projects remain incomplete for years because of funding gaps, legal disputes or poor planning.
The new rules by IBBI try to solve this by making the resolution process more transparent. A bidder will now receive a clearer picture of how much money is needed to finish a project. A homebuyer will know how their claim will be treated and when possession may happen.
The amendment also requires visible signboards at project sites and offices. These signboards must state that the company is undergoing CIRP and provide the resolution professional’s contact details. This helps buyers and contractors know whom to contact.
The reforms follow wider changes to the Insolvency and Bankruptcy Code by IBBI. The IBC Amendment Act, 2026 received Presidential assent in April and most provisions came into force from May 25, 2026. It also strengthened project-wise assessment and introduced a creditor-initiated insolvency process.
What Buyers Should Do
Homebuyers in an insolvent developer’s project should stay alert. They should:
- Check whether their project is covered by CIRP.
- Submit their claim through the prescribed process.
- Keep booking agreements, payment receipts and RERA records ready.
- Follow updates from the resolution professional.
- Attend creditor meetings or send concerns through authorised representatives.
- Check the resolution plan for possession, refund or title-transfer terms.
The new rules by IBBI do not guarantee immediate possession. But they create a clearer framework for completion, buyer representation and accountability.
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