Homebuyers are likely to benefit from a government proposal to have individual project resolution in the real estate sector under the Insolvency and Bankruptcy Code (IBC) framework, experts said.
“Under the proposed framework related to corporates that are promoters of real estate projects, insolvency provisions would be applicable to projects where default has been reported. Thus, there would be minimal disruption to other projects of the same company,” said Anshuman Magazine, chairman and chief executive officer (CEO), India, South East Asia, Middle East & Africa, CBRE, a real estate consultancy firm.
The government proposes a special dispensation to initiate Corporate Insolvency Resolution Process (CIRP) against a specific project that has defaulted instead of the whole company. Under current rules, when a company becomes bankrupt its other projects are also stalled and this affects a large number of homebuyers.
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