Chances are, you have a real estate horror story to share.
The new reality is realty is learning to play straight. A far cry from the days when hanky-panky deals ruled and the game was anything but fair.
Time to uncork the champagne? Yes and no.
A LOT ON THE PLATE
You may say action speaks louder than words. Housing for All, GST and RERA – all are proof the government is showing resolve and intent. And they all put the consumer before anything else.
The IBC ordinance is the latest entry into the ring. What does it hold for homebuyers like you and me? A lot.
One, it seeks to protect homebuyers’ interest. They will now be on par with financial creditors when it comes to claims should a realtor go bankrupt. The advance given by them to the builder will be deemed as credit. In the case of insolvency, they are entitled to get back their homes or a refund.
In this context, the delayed projects of Jaypee Infratech Supertech and Amrapali and the hardships of homebuyers are all well known.
A TWEAK HERE AND THERE
Two, the ordinance seeks to lower the voting cut-off for approval of resolution plans to 66 per cent majority. That’s a big drop from the 75 per cent previously. The lower limit is to give the resolution plan a shot rather than outright liquidation.
Plus, the insolvency application will be allowed to be withdrawn only if 90 per cent of creditors agree. That means a higher bar is set for withdrawal of the insolvency application.
THAT LEAN LOOK
The latest ordinance takes the game a notch above as it seeks to remove grey areas and streamline eligibiity rules. The Section 29A in the IBC, introduced by the first ordinance that put paid to hopes of promoters seeking a back-door entry, has been made tighter to make it leak-proof.
People who enter into backdoor arrangements with corporate debtors are sought to be clubbed under the definition of connected people. That’s another leak the new IBC ordinance is trying to plug.
After all, the government is keen to give the maligned real estate sector the credibility it so desperately needs.
THE TIDE IS TURNING
With FDI inflows staging a comeback, the missing pieces in the real estate story are falling into place. But RERA is still a job half done. It has been one year since the Real Estate (Regulation and Development) Act, 2016, kicked in. The sad part is its compliance across
Till then, it’s a waiting game!