The IBBI has issued new CIRP rules for real estate projects allowing the Committee of Creditors (CoC) to retain projects during resolution if 66% voting share is met. The move aims to stabilize realty insolvency cases and ensure faster decision-making.
New CIRP Framework for Real Estate Projects
The Insolvency and Bankruptcy Board of India (IBBI) has introduced revised regulations under the Insolvency and Bankruptcy Code (IBC), specifically tailored for real estate projects undergoing Corporate Insolvency Resolution Process (CIRP). A key provision allows the Committee of Creditors (CoC) to retain the development project with a 66% majority voting share, reinforcing creditor control in resolution decisions.
Compliance Obligations for RPs and Debtors
Resolution Professionals (RPs) are now required to ensure strict adherence to timelines and disclosures specific to real estate developers. The regulations mandate transparent reporting on project status, pending approvals, and utilization of interim finance. Corporate debtors must submit complete project documentation within seven days of appointment of the RP.
According to the notification, the 66% threshold ensures quorum for critical decisions, including continuation of operations and approval of resolution plans involving retained assets. The rules also clarify that stalled projects can be restructured without transfer if financial creditors agree on rehabilitation strategy.
The CoC shall have the authority to decide on continuation of the corporate debtor’s operations in real estate projects, provided such decision is taken with not less than 66% voting share.
Implications for Practitioners
Legal advisors and RPs must update their CIRP checklists to incorporate these sector-specific mandates. The amendment is expected to reduce delays in real estate insolvencies by empowering CoCs to preserve project value and avoid distress sale. Stakeholders should closely monitor implementation through NCLT and IBBI guidance.
Citations
- IBBI (Real Estate Sector CIRP) Regulations, 2026
