Date : 15-01-2020
Everywhere in India where new developments are going, real estate investors or home buyers have faced lots of problems of for getting possession of the property or either the refund of their hard earn money ,but unfortunately neither of option has really worked.
Past two decades when everyone felt heavy construction around the prominent cities, but suddenly from last 5years, people felt like cheated up to no extent. And no proper legal safeguards are there to protect their interests. Even the commencement of RERA law in year 2017 and Insolvency Code in year 2016 had yet not able to make significant impact in terms of recovering home buyer’s money.
Recently post the massive failure of Noida based real estate giant- Jaypee Infrastructure Ltd., law itself evolving its way to make proper path line of granting relief to innocent home Buyers.
In case of complaint against builder under IBC, home buyers shall be treated as financial creditors.
Important question often asked by home buyers from me -
What sense it makes for home buyers to become financial creditors under insolvency and bankruptcy code?
Here is the answer:-
Do really home buyers will get relief by just becoming financial creditors?
Answer is really NO, but yes it makes lots of difference in recovery process for home buyers by becoming financial creditor. Even financial creditors are of two types – Secured creditors and unsecured creditor, the major catch is generally home buyers falls into list of UNSECURED FINANCIAL CREDITOR, Therefore even after becoming financial creditor, home buyers will get money only if first the secured financial creditors are discharged.
Disclaimer:- This article is for the general information and awareness of its readers, In-case of any legal matter in relation with readers, they are expected to have legal opinion before placing reliance on it. Further it contains completely author's views on the subject and completely unbiased based on authors own experience, study and understanding.
Author : Rajul Jain (CA, MCOM, LLB, MBA, CNPO, CPFA, NCFM, AMLS) is Chartered Accountant and Legal Consultant, academically he is highly qualified and have gone through various certifications. He extensively speaks and writes on finance, taxation and legal matters. The author can be reached at firstname.lastname@example.org