The Insolvency and Bankruptcy Board of India (IBBI) has introduced stricter regulations for real estate insolvency proceedings, with a focus on completing stalled housing projects, ensuring timely home delivery and strengthening homebuyer participation in the resolution process. The amended rules mandate independent assessments of construction progress, project funding requirements and completion timelines before potential bidders are invited to submit expressions of interest.
The changes have been notified under the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) (Fifth Amendment) Regulations, 2026. They follow the recommendations of a committee led by Jayanti Prasad, which submitted its report in April 2026 with 155 recommendations covering 55 issues. The committee had called for a project-focused approach to insolvency resolution and stronger safeguards for homebuyers.
Project-Level Resolution and Exclusion from Insolvency
Under the amended framework, creditors holding at least 66% of the voting share can recommend excluding an individual real estate project from the corporate insolvency resolution process. The recommendation must include recorded reasons, following which the resolution professional will approach the adjudicating authority for approval.
The regulator has also made independent project assessments mandatory. Independent professionals must evaluate the construction status, pending statutory approvals, funding requirements and risks associated with project completion. Their assessments must include realistic timelines for completing construction and handing over homes.
These evaluations must be completed before expressions of interest are invited from prospective bidders. The objective is to provide potential resolution applicants with a clearer understanding of each project’s financial and construction status.
According to the Jayanti Prasad committee report, India had 221 ongoing real estate insolvency cases involving approximately 1,08,887 homebuyers as of September 30, 2025.
Greater Clarity on Homebuyer Claims and Possession
The amended regulations require resolution plans to clearly explain how homebuyers’ claims will be addressed. These arrangements may include possession of homes, transfer of property titles, refunds or other settlement mechanisms.
Resolution plans must also specify construction completion and possession schedules for individual projects, phases or towers. Periodic progress reporting will be required to track implementation.
The rules also cover homebuyers whose claims have not been formally submitted but are included in the information memorandum. This provision seeks to ensure that their interests are considered during the resolution process.
For eligible requests relating to possession and property registration during insolvency proceedings, creditors can provide in-principle approval. This mechanism is intended to avoid the need for separate decisions on every individual homebuyer’s request.
Stronger Financial Monitoring and Homebuyer Representation
IBBI has strengthened project-level financial monitoring by expanding existing separate-account requirements. The amended framework requires project-wise reporting of receipts and payments, along with compliance with the Real Estate (Regulation and Development) Act (RERA) provisions governing the utilisation of funds.
Homebuyers will also receive representation on monitoring committees responsible for supervising the implementation of approved resolution plans. Representatives from RERA authorities and other competent authorities may also participate, wherever applicable, subject to their agreement.
Additionally, minutes of creditors’ meetings must record concerns raised by authorised homebuyer representatives. The resolution professional must circulate consultation meeting minutes to creditors, creating a formal record of homebuyers’ views during the insolvency process.
The amended regulations also provide for expanded project-level disclosures covering statutory approvals and pending litigation.
Focus on Timely Delivery of Stalled Housing Projects
The revised framework places greater emphasis on completing individual housing projects rather than treating all projects of an insolvent real estate company as a single resolution exercise. Independent assessments, project-wise financial reporting and homebuyer representation are intended to improve transparency and accountability.
By introducing clearer delivery schedules and stronger monitoring mechanisms, IBBI aims to make the insolvency resolution process more responsive to homebuyers’ interests and improve the prospects of completing stalled real estate developments.
