Noida homebuyers relieved at being given financial creditor status in IBC

NOIDA/: As the Union Cabinet on Wednesday approved an ordinance to give homebuyers creditor status under the IBC (Insolvency and Bankruptcy Code), presumably allowing them to be treated as financial creditors, homebuyers of Noida and Greater Noida appreciated the move as a much-needed and significant step.

However, initially, they are taking the decision just as their promotion in the category but are expecting a status higher than financial creditors.

“I hope that the status elevation of home buyers to Finan- cial Creditors is good for us. The government in its wisdom has done a good thing but we have been demanding home buyers status should be first and at high priority since August 2017,” said Devendra Yadav, a member representing 10 associations of Jaypee Infratech’s Wish Town projects, comprising over 2,500 homebuyers.

The Confederation of Real Estate Developers’ Associations of India (CREDAI), an apex body of private real estate developers associations, has also welcomed the move and stated that it will protect the rights of home buyers.

“The move is good for the protection of the money and rights of homebuyers. After RERA, which protects the money of buyers in an ongoing concern, the buyer’s investment will now be protected even in the case of insolvency. This will instil a sense of confidence amongst buyers of under-construction property,” says Pankaj Bajaj, president, CREDAI NCR.

The move is aimed at providing a relief to homebuyers who are stuck in incomplete real estate projects against which insolvency proceedings are currently on.

According to the new ordinance, the homebuyers will now be treated at par with banks and institutional creditors and will be given priority while recovering dues from bankrupt or insolvent real estate companies.

Meanwhile, there is a chaos among the home buyers of few particular builders’ groups as to how they will get the refunds against their property.

“Many builders owe huge debts to the government and banks and the system will uphold the superiority of a bank mortgage over any other claim. The small amount which will be left after clearing the debts will be nothing but cumin seeds in the mouth of the camel,” a buyer said.