IBBI Notifies Fifth Amendment to Insolvency Rules for Stressed Real Estate Projects

What happened

The Insolvency and Bankruptcy Board of India (IBBI) notified the Fifth Amendment to its insolvency resolution regulations on 30 October 2026. The board said the amendment is meant to help stressed real estate developers deliver homes, strengthen the role of homebuyers in the process, and allow projects to be handled one by one, while reducing gaps in information.

The board announced the change in Press Release No. IBBI/PR/2026/18, dated 31 October 2026. It said delays in resolving stressed real estate projects were affecting homebuyers, and that the amendment aims to support more informed and viable resolutions, greater transparency and accountability, and stronger protection for homebuyers and other stakeholders.

What changes in the process

• Project-wise treatment. Insolvency proceedings in real estate should ordinarily be conducted project by project. The Committee of Creditors (CoC) may, with at least 66% voting share, recommend to the Adjudicating Authority that a real estate project be excluded from the corporate insolvency process, giving recorded reasons. The resolution professional then files an application, which the Adjudicating Authority will consider.
• Homebuyer requests. The CoC may approve each request from homebuyers individually, or give an in-principle approval that lets the resolution professional process all such requests as they arrive during the process.
• Separate accounts. The rule requiring a separate bank account for each real estate project, first introduced in February 2024, is retained. The resolution professional must also submit project-wise statements of receipts, payments and other financial information to the CoC.
• Fund use. Compliance with fund utilisation requirements under the Real Estate (Regulation and Development) Act, 2016 must be ensured during the process.
• Technical and cost-to-complete assessment. A technical and cost-to-complete assessment of each real estate project is introduced, along with enhanced disclosures about the project.
• Disclosure of homebuyer preferences. Homebuyers' preferences on possession, conveyance, registration or transfer of title, refunds or other relief must be disclosed, along with the number of allottees who indicate each preference or no preference.
• Homebuyer representatives and monitoring. Authorised representatives of homebuyers must submit minutes of their meetings with creditors to the resolution professional, who places them before the CoC. Allottees get a seat on the Monitoring Committee.

Claims form for allottees

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

Details reported in coverage of the amendment

Reporting on the regulations says homebuyer representatives must be offered a choice of three insolvency professionals. It also says the monitoring committee must include an allottee representative, a RERA representative and, where applicable, a representative of the competent authority. Resolution plans, according to that reporting, must show sold and unsold inventory separately and set project-, phase- or tower-wise completion timelines.

What it means for homebuyers

For buyers in projects that go into insolvency, the amendment is intended to make the process more transparent. The disclosure rules require creditors and the resolution professional to set out what homebuyers have asked for, and the monitoring committee gives allottees a formal place in oversight. Homebuyers' requests can be handled through individual CoC approvals or through a standing in-principle approval.

One law firm's analysis says the reforms could mean faster possession in viable projects, better information and a stronger voice for homebuyers. That is the firm's reading of the rules, not an IBBI statement. Another analysis describes the framework as simplifying the process for homebuyers seeking unit possession during insolvency proceedings.

Some coverage cites a figure of more than 100,000 homebuyers who could be affected. That is the outlet's framing, not an official count. The board's background note, as cited in reporting, put the number of homebuyers in ongoing real estate insolvency cases at about 108,887 as of 30 September 2025.

What it means for investors and the market

The amendment asks for a cost-to-complete assessment that should feed into the information memorandum. Coverage says this is meant to help attract more realistic bids, since bidders can price projects against a documented cost estimate. Commentary also describes the reforms as a step toward stabilising the real estate sector. That is an analytical view, not an official statement.

Background to the amendment

• 3 February 2025: IBBI amended the CIRP regulations with a focus on real estate. Resolution professionals must prepare a detailed report on the status of development rights, approvals and permissions for real estate projects within 60 days of the start of insolvency. The amendment also brought the Real Estate Regulatory Authority into the Committee of Creditors.
• 30 June 2026: IBBI released a discussion paper titled Strengthening Resolution Outcomes in Real Estate Insolvency. It proposed detailed amendments to the CIRP Regulations, 2016. The final Fifth Amendment appears to follow the committee's proposals on project-wise treatment.

What comes next

The regulations came into force on the date of their publication in the Official Gazette. No further IBBI step with a set date has been announced as of 1 November 2026.

A project can be excluded from the corporate insolvency process only after the CoC's 66% recommendation and a decision by the Adjudicating Authority. Developers, homebuyers and creditors will be working under the new rules in cases that are already pending or that begin after the amendment takes effect.