Insolvency regulator amends CIRP rules for stressed real estate projects

The Insolvency and Bankruptcy Board of India (IBBI) has notified amendments to the rules that govern insolvency proceedings for stressed real estate developers. The Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) (Fifth Amendment) Regulations, 2026 were notified on 30 October 2026. The board announced them in a press release dated 31 October 2026, numbered IBBI/PR/2026/18.

The corporate insolvency resolution process (CIRP) is the legal route under which a company's debts are resolved under the control of a resolution professional (RP) and a Committee of Creditors (CoC). The board said the changes are meant to facilitate more informed and viable resolution of real estate projects, enhance transparency and accountability, and strengthen the interests of homebuyers. It gave a reason for the change: delays in resolving stressed real estate projects were affecting homebuyers.

What changes for homebuyers

Under the amended rules, the CoC may either approve each homebuyer request individually or grant an in-principle approval that authorises the RP to process all such requests as they are received during the CIRP.

Homebuyers' preferences must also be disclosed. These cover possession, conveyance, registration or transfer of title, and refunds or other relief. The number of allottees who indicate each preference, or no preference, must be shown as well.

Authorised representatives of homebuyers must send minutes of their meetings with creditors to the RP, who will place them before the CoC. Allottees will also get a seat on the Monitoring Committee.

Separately, the board issued Circular No. IBBI/CIRP/109/2026 dated 30 October 2026. It introduces a revised Form CA for claims by financial creditors in a class. Part I is for financial creditors other than allottees, and Part II is for real estate allottees.

Project-wise accounts, assessments and exclusions

The amendment keeps the requirement, introduced in February 2024, that each real estate project have its own bank account. The RP must maintain these accounts and submit project-wise statements of receipts, payments and other financial information to the CoC at periodic intervals. The rules also require compliance with fund utilisation requirements under the Real Estate (Regulation and Development) Act, 2016 during the CIRP.

The board has introduced a technical and cost-to-complete assessment of real estate projects, and it has expanded disclosures about the projects themselves.

The amendment also sets out a route for excluding a project from the CIRP. The CoC may, with at least 66% of the voting share, recommend exclusion of a project to the Adjudicating Authority, and must record its reasons. The RP must then file an application, and the Adjudicating Authority will consider the recommendation. A project cannot be excluded on the CoC's recommendation alone.

Background and what comes next

The changes build on earlier steps. A February 2025 amendment required RPs to prepare a detailed report on development rights, approvals and permissions for real estate projects within 60 days of the insolvency commencement date. The same amendment included the Real Estate Regulatory Authority in the CoC. In June 2026, the board issued a discussion paper, "Strengthening Resolution Outcomes in Real Estate Insolvency", which proposed changes to the CIRP Regulations. The final amendment follows the committee proposals on project-wise treatment, under which real estate insolvency should ordinarily be conducted project by project.

The regulations came into force on the date of their publication in the Official Gazette. The press release does not specify a separate commencement date. No further IBBI step with a date has been announced.

For homebuyers in stalled projects, the practical steps are to check whether their project is in the CIRP, to see whether their representatives are attending creditor meetings, and to confirm which claims form applies to them. Developers and RPs will need project-wise accounts and the new assessment and disclosure data in place. Commentary from legal firms has described the changes as a simplification of the process for taking possession during insolvency, but the outcome for individual projects will depend on how the CoC and the Adjudicating Authority apply the rules.