India's IBBI tightens real estate insolvency rules to prioritise home delivery
India's insolvency regulator, the IBBI, has amended real estate insolvency rules to prioritise project completion and homebuyer oversight. The new rules mandate independent construction assessments, allow creditors with 66% voting share to recommend project exclusion, and give homebuyers representat
India's insolvency regulator, the Insolvency and Bankruptcy Board of India (IBBI), has tightened real estate resolution rules to prioritise project completion, home delivery and homebuyer oversight. An amendment notified on Friday, 31 Oct 2026, mandated independent construction assessments, delivery schedules and a mechanism for excluding individual projects from insolvency.
The changes are aligned with the April 2026 recommendations of the Jayanti Prasad-led committee. The panel proposed 155 measures across 55 issues, advocating project-focused resolution and stronger homebuyer safeguards. According to the Jayanti Prasad report, there are 221 ongoing real estate insolvencies involving approximately 1,08,887 homebuyers, as of 30 Sep 2025.
These latest changes have been notified in the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) (Fifth Amendment) Regulations, 2026. Under the new conditions, creditors holding at least 66 per cent voting share can recommend excluding a project, with recorded reasons. The resolution professional must then apply to the adjudicating authority, which considers the request.
The amendment also requires independent professionals to assess each project's construction status, outstanding approvals, funding needs and completion risks. Assessments must include 'realistic timelines for completion and delivery of the project', the notification said. They must be obtained before expressions of interest are invited from potential bidders.
Resolution plans must now spell out how buyers' claims will be treated through possession, title transfer, refunds or other arrangements. They must specify completion and possession timelines by project, phase or tower, alongside periodic progress reporting. For eligible possession and registration requests during insolvency, creditors can grant 'in-principle approval', avoiding separate decisions for every buyer.
The amendment strengthens existing separate-account requirements by adding project-wise receipts and payments reporting and explicit compliance with RERA fund-utilisation rules during insolvency. Homebuyers gain representation on monitoring committees overseeing implementation. RERA and competent-authority representatives can also join, where applicable, subject to their agreement. Creditors' meeting minutes must record concerns expressed by buyers' authorised representatives.
