New Delhi: Four years ago, Kanupriya was between 20,000 home buyers in Jaypee Infratech’s Project in Noida who hoped that the initial resolution would help him have an apartment he had ordered in 2012.
He was still waiting as a process of resolution – monitored directly by the Supreme Court – it seems Enter the last leg.
Jaypee is probably the highest case where the hunt for the applicant resolution continues but there are several other real estate projects throughout the country where home buyers continue to face uncertainty.
Five years after the bankruptcy & bankruptcy code (IBC) was notified, only eight resolution plans for the real estate sector that had been approved although around 205 cases had been accepted until March 202, 20021, Indian data purchase data.
It was translated into a success rate below 4%, making it the worst performance sector, computer restrictions and related activities (see graph).
This regardless of the stakes is much higher.
Unlike other sectors, where it is a bank and operational creditors such as suppliers who dragged the company to the National Company Legal Tribunal (NCLT), in realty there are additional challenges to protect the interests of home buyers, which invested their lifetime savings.
No wonder, this is the only area where even the government makes exceptions in crashing home buyers from the operational creditor category for financial creditors – giving them the same voice in deciding the new resolution applicant.
“Unlike in other sectors, there are more complexity in real estate.
Not only IBC, which usually has institutional creditors and suppliers.
Rera, which means protecting buyers who might have a bank loan, is another case at that time.
In addition, rules Continues to grow, which makes it difficult to comply with newer guidelines when developers are seen taking over a project.
Basically, these regulations and guidelines are still working in the process and need to evolve further.
Those, they are still a major upgrade to the lack of redressal regulations and mechanisms Previously, “said Shobhit Agarwal, MD & CEO in Anarock Capital.
For banks, the main focus of the resolution exercise is to minimize the hit they have to take their loans and maximize profits.
Instead, home buyers want a more stable company to take over the company even if it means that lenders must take a haircut.
What has a complicated problem is a decrease in real estate prices, making the project cannot be used for resolution applicants.
“Projects usually will not be commercially feasible if the cost of construction is more than financial receivables and financial creditors consist of financial institutions and home buyers.
In many cases, funds have been transferred and corporate debtors (companies) do not have enough money to build units.
In such cases , the project is in limbo.
In addition, the market has no adequate liquidity to support real estate cases, “said Chandra Prakash, a professional resolution that deals with three real estate projects.
There are other complications when land is owned by more than one entity and needs to be combined.
“In such cases, project bankruptcy laws must apply while in IBC, we do not have a project or bankruptcy (provision),” Prakash added.
The problem with resolution has produced suggestions for review of provisions.
Former Bank Oriental Commerce Cmd Mukesh Kumar Jain suggested a hybrid model for real estate.