Unlocking Justice: Homebuyers Empowered Through Insolvency Against Builders

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Ancoraa Resolution, a financial services firm managed by experienced insolvency professionals, plays a vital role in assisting in the process of homebuyer claims against builders.

Embarking on the journey of homeownership is a dream for many, marked by excitement and anticipation. Yet, for those who find themselves trapped in the web of delays, unfulfilled promises, and withheld possession by powerful developers, the dream can turn into a frustrating nightmare. This is a familiar scenario faced by numerous homebuyers, who, until recently, felt helpless against formidable builders armed with financial and legal prowess. However, a game-changer has emerged in the form of the Insolvency and Bankruptcy Code (IBC), offering a powerful avenue for homebuyers to claim their rights and compel builders to fulfil their obligations. In this article, we’ll discuss the process of homebuyer claims against builders and how it came to be.

Recognising Homebuyers as "Financial Creditors" under IBC:

The journey toward empowering homebuyers under the IBC began with a realisation that the initial enactment in 2016 did not adequately safeguard the interests of those investing in real estate projects. Despite being vital stakeholders in the corporate insolvency resolution process, homebuyers found themselves categorised as 'other creditors,' lacking the standing of financial or operational creditors. This left them unable to initiate insolvency proceedings against defaulting builders or developers.

To address these concerns, the Insolvency and Bankruptcy (Amendment) Ordinance, 2018, came into effect on June 6, 2018. The ordinance brought about a pivotal change, expressly recognising homebuyers/allottees as financial creditors under the IBC. In addition to Section 5(8)(f) clarified that payments made by an allottee under a real estate project would be deemed to have a commercial effect of borrowing. This crucial shift empowered homebuyers to file claims against builders through the initiation of corporate insolvency resolution proceedings (CIRP) against defaulting developers.

Minimum Requirements for Filing:

While the IBC provides a pathway for homebuyers to seek justice, a minimum threshold must be met. According to the proviso to Section 7 of the IBC, homebuyer claims against builders require the joint application of 100 allottees or at least 10% of allottees, whichever is less. Recognising the necessity for collective action, Dr. Rajendra M Ganatra, an insolvency resolution professional, emphasises the need for a united effort. With technological advancements, platforms like Ancoraa Resolution have made it easier for individuals to initiate campaigns against developers. Participants can contribute to the cause, collectively reaching the minimum threshold required by law and initiating an application under the IBC through a licensed insolvency professional.

Submitting Claims:

Once an application is admitted under Section 7, the Adjudicating Authority (AA) issues an order under Section 14 of the IBC, declaring a moratorium and appointing an interim resolution professional (IRP). The IRP is tasked with making a public announcement setting the deadline for creditors, including homebuyers, to submit their claims. While Regulation 6 read with Regulation 12 of the IBBI (CIRP Regulations) 2016, sets a 14-day window for claim submissions from the IRP's appointment, flexibility is provided, allowing claims to be submitted within 90 days from the date of insolvency commencement.

How Ancoraa Resolution Supports Homebuyers:

Ancoraa Resolution, a financial services firm managed by experienced insolvency professionals, plays a vital role in assisting in the process of homebuyer claims against builders. By simplifying the process of filing claims through an easy, fast, and hassle-free online platform, Ancoraa Resolution ensures timely submissions. Licensed insolvency professionals from Ancoraa guide homebuyers through the intricacies of the process, ensuring claims are submitted within the specified time. 


The process of claim filing can be difficult and time-consuming. MSME Samadhan portal simplifies the process by offering an easy-to-navigate platform to register the claim online. It offers a quick approach to dealing with the negotiation process, which is also done by legal means. The journey from feeling helpless to actively participating in the resolution process is now within reach, offering hope and justice to those navigating the challenges of homebuying.