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Insolvency regulator empowers property buyers, puts the monapar with creditors

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Insolvency regulator empowers property buyers, puts the monapar with creditors
The insolvency regulator has brought inaspecial provision to protect the homebuyers of beleaguered real estate companies such as Jaypee Infratech and Amrapali.
The Insolvency and Bankruptcy Board of India (IBBI), which is implementing the Insolvency and Bankruptcy Code, has said owner of undelivered properties can become part of the committee of creditors and stakeaclaim equivalent to the amount they have paid to realtors
Their claims, according to the regulator, would be treated onapar with claims of other financial and operational creditors and would not be pushed to the bottom of the list.
Homebuyers can now file form ´F´, introduced by the insolvency regulator, for claims.
“Such entities should submit proof of their claims to the interim resolution professional or resolution professional,”anotification issued by the IBBI on Wednesday said. This section of homebuyers, however, would not be able to take any realtor to the insolvency tribunal.
Earlier, only investors who were promised assured returns were treated as financial creditors and could seek claims.
There was an ambiguity over whether homebuyers could stake claim once their developer´s case was admitted in the National Company Law Tribunal (NCLT).
Experts had earlier said even if homebuyers claimed stake, their claims would be settled after all financial and other operational creditors´ dues were paid. This is not the case now.
While banks and financial institutions are financial creditors, workmen and service providers are considered operational creditors.
The Business Standard, New delhi, 18th August 2017

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