Even though the Real Estate Regulation Act is now in force, property buyers, mainly in Noida, are failing to see much relief as it stands today.
When home buyers are faced with an insolvency proceeding, here’s what you can do to make sure that your rights are protected when the builder fails to complete the project
What is insolvency?
Insolvency is the state of being incapable to pay the money owed, by a person or company, on time; those in a state of insolvency are said to be insolvent.
In case of insolvency:
Insolvency proceedings should confirm that homebuyers get their respective properties and the flow of money remains non-disruptive by bringing in a government agency or co-developer to finish the project when a builder fails to do so.
What is the change?
The Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, and the Insolvency and Bankruptcy Board of India (Fast Track Insolvency Resolution Process for Corporate Persons) Regulations, 2017, provide forms for submission of claims by operational creditors, including financial creditors, workmen, and employees.
Earlier, there was no provision for individuals to claim under the insolvency law. That hole has recently been plugged by a government notification.
How to make your claim?
The Insolvency and Bankruptcy Board of India notification says that a person claiming to be a creditor should “submit proof of its claim to the interim resolution professional or resolution professional in person, by post or by electronic means in Form F of the Schedule.”
The existence of the claim of the creditor may be proved on the basis of the records available in an information utility, if any, or other related documents adequate to establish the claim, comprising any or all of the following:
1. Bank statements of the customer showing non-satisfaction of claim
2. Documentary evidence demanding satisfaction of the claim
3. An order of court or tribunal that has arbitrated upon non-satisfaction of claim
How can it be resolved?
The best way to resolution could be the completion of the project through a change of developer (if the existing developer is insolvent) so that homebuyers get the unit which was promised to them.
