Insolvency board’s regulatory amendments to ensure fair and equitable treatment of all homebuyers

To ensure fair and equitable treatment of all homebuyers, the insolvency regulator has mandated that details of all allottees, including those who have not submitted claims, should be included in the resolution plan submitted by a resolution applicant for a real estate project undergoing the Corporate Insolvency Resolution Process (CIRP).

Further, as part of reforms to strengthen the valuation framework under the Insolvency and Bankruptcy Code, 2016, the Insolvency and Bankruptcy Board of India (IBBI) has amended regulations providing for standardisation of valuation reports and documentation, harmonisation of valuation standards across insolvency processes, and designating a Coordinating Valuer, among others.

“The inclusion of all real estate allottees in the information memorandum and treatment thereof in any resolution plan, will address uncertainty in respect of real estate allottees who could not file claims under IBC for whatever reasons,” said Hari Hara Mishra, CEO, Association of ARCs in India.

He noted that there is an amount of asymmetry of information between seller and buyer, which adversely impacts efficient price discovery.

Mishra said the IBBI measures will help bridge this information gap considerably, improve disclosures, bring in more transparency, and have a standardised approach - all of which will lead to value maximisation.

As per the reforms introduced to enhance the information disclosure framework under the Code, IBBI said the Information Memorandum (IM) prepared by the resolution professional will include details of all allottees, including their names, amounts due, and units allotted, whose claims are reflected in the books of accounts of the corporate debtor or in the records of the Real Estate Regulatory Authority, but who have not submitted claims to the resolution professional.

Further, where such details are included in the IM, the resolution plan will also provide for fair treatment of such allottees.

IBBI emphasised that this amendment seeks to ensure fair and equitable treatment of all homebuyers, enhance transparency, and avoid uncertainty or disputes during plan implementation.

Review of the valuation framework

IBBI has undertaken a comprehensive review of the valuation framework and introduced structural reforms to enhance transparency, uniformity, and overall credibility of valuation practices under the Code.

Under the amended regulations, the registered valuer will prepare the valuation report and maintain such documentation as per the format notified by the board. This is intended to promote uniform disclosures, improved auditability, reduced disputes, and enhanced comparability across valuation reports.

The registered valuer has to compute the fair value and liquidation value in accordance with the valuation standards notified by the board.

IBBI said the definition of ‘fair value’ has been modified to explicitly recognise both tangible and intangible assets, along with their underlying synergies. This will ensure that the value of the Corporate Debtor (CD) is captured in a holistic manner, thereby reflecting its true commercial worth and economic value.

Designating a Coordinating Valuer amongst the appointed registered valuers for estimation of the Fair Value of the CD will ensure that enterprise-level consideration, including synergies and going-concern attributes, are appropriately reflected in the value of the CD, thereby enhancing the robustness and credibility of valuation outcomes.

Published on February 26, 2026