IBBI Proposes Major Reforms for Real Estate Insolvency

The Insolvency and Bankruptcy Board of India (IBBI) has suggested changes to improve the insolvency process for real estate firms. Key proposals include including land authorities in creditor meetings and addressing cancelled land allotments. The focus is on improving transparency and protecting stakeholder interests.

The Insolvency and Bankruptcy Board of India (IBBI) has proposed significant reforms aimed at improving the insolvency process for real estate companies. These changes, announced on Thursday, aim to better protect stakeholders within the framework of the Insolvency and Bankruptcy Code (IBC).

One notable reform is the inclusion of land authorities in Committee of Creditors (CoC) meetings as non-voting invitees. Despite their critical role in real estate projects, land authorities have been notably absent from these discussions. IBBI believes their inclusion will enhance regulatory compliance and clarity, ultimately boosting the feasibility of resolution plans.

Other proposals include improving transparency by making meeting minutes accessible online, addressing issues of cancelled land allotments, and simplifying possession handover for projects. The IBBI has invited stakeholder feedback on these proposed changes by November 27, before finalizing the rules under section 196 of the code.

(With inputs from agencies.)