IBBI's New Rules for Builders in Insolvency: What Changes for Bengaluru Homebuyers
IBBI's 30 October 2026 amendment to the CIRP Regulations adds project-wise bank accounts and RERA fund-use compliance, a 66% vote route to exclude a project, an independent cost-to-complete assessment, mandatory project-wise resolution plan contents, and allottee and RERA seats on monitoring committees.
Notification No. IBBI/2026-27/GN/REG155, dated 30 October 2026, did not make headlines in Bengaluru. But for a family whose flat is stuck in a builder's insolvency, it rewrote what the resolution professional must track, what bidders must be told, and what a winning resolution plan must promise. The IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, as amended up to 30 October 2026, now carry a set of project-by-project rules for builders with real estate projects.
This guide reads those changes from a homebuyer's seat. It covers project accounts, carving out a viable project, the new cost-to-complete assessment, what a resolution plan must contain, and who sits on the committee that watches the plan being carried out. It is not a view on any company's insolvency.
The short answer. From 30 October 2026, the CIRP Regulations require a separate bank account and a project-wise receipts and payments statement for each real estate project, compliance with RERA fund-use rules during insolvency, an option for the committee to seek exclusion of a project by at least 66 per cent of voting share, and an independent technical and cost-to-complete assessment before bids are invited. Every resolution plan must now give project-wise unit counts, the treatment of allottees' claims, delivery timelines and progress reporting, and the monitoring committee must include an allottee representative and, if they agree, a RERA representative. The trade-off: buyers get far more project-level information and a seat at the monitoring table, but none of this guarantees a flat; the approved plan still decides.
What did IBBI change for real estate insolvencies on 30 October 2026?
It turned general insolvency rules into project-level duties. Footnotes in the amended regulations attribute the following to Notification No. IBBI/2026-27/GN/REG155 dated 30 October 2026: a substituted regulation 4D on project-wise records and fund use, new regulations 4F and 4G on project identification, exclusion and cost-to-complete assessment, a substituted regulation 38A on the mandatory contents of resolution plans, new project-wise details in the information memorandum, and a new proviso adding allottee and RERA representatives to the monitoring committee.
The same day, IBBI issued Circular No. IBBI/CIRP/109/2026 revising the claim form for allottees. Our guide to filing a homebuyer claim in the revised Form CA covers that side, and our report on IBBI's circular on RERA compliance and project signboards covers the disclosure rules.
Will your project's money be kept separate during insolvency?
Yes, by regulation. Regulation 4D(1) says that where a corporate debtor has any real estate project, the interim resolution professional or resolution professional "shall operate a separate bank account for each real estate project." Regulation 4D(2) requires a project-wise statement of receipts and payments to be placed before the committee at intervals it considers appropriate.
Regulation 4D(3) adds that the professional "shall ensure that, in respect of every real estate project of the corporate debtor, the fund utilisation requirements provided under the Real Estate (Regulation and Development) Act, 2016 are complied with" during the process. For a Bengaluru buyer, this links the insolvency to the RERA designated account rules you already know from the registration stage.
Can a healthy project be carved out of the insolvency?
It can be recommended for exclusion. Regulation 4F(1) says that where the builder has more than one real estate project, the resolution professional shall place before the first meeting of the committee each project's RERA registration details, stage of completion, status of possession and occupancy, and number of completed and incomplete units.
Under regulation 4F(2), the committee may, "by a vote of not less than sixty-six per cent of voting share," recommend to the Adjudicating Authority, with reasons recorded, "the exclusion from the corporate insolvency resolution process of any real estate project." Regulation 4F(3) says the resolution professional then makes the application. The final call rests with the Adjudicating Authority, so a recommendation is not an exclusion.
| Regulation | What it now requires | Why a homebuyer should care |
|---|---|---|
| 4D | Separate bank account and project-wise receipts and payments statement; RERA fund-use compliance | Your project's money is tracked separately during insolvency |
| 4F | Project-wise details at the first committee meeting; exclusion of a project on 66% vote and Adjudicating Authority approval | A near-complete project may be recommended for separate treatment |
| 4G | Independent technical and cost-to-complete assessment before inviting expressions of interest | Bidders see realistic cost and timelines for your tower |
| 38A | Resolution plan must give unit counts, treatment of allottee claims, delivery timelines, progress reports | The plan must say how it deals with buyers like you |
| Monitoring committee proviso | Allottee representative, and RERA and competent authority representatives if they agree | Buyers have a voice while the plan is being implemented |
What is the new cost-to-complete assessment?
An independent check on what it will take to finish your project. Regulation 4G(1) says the resolution professional shall, with the committee's prior approval, appoint "one or more suitably qualified and independent professionals" to undertake "a project-wise technical and cost-to-complete assessment." Regulation 4G(2) lists what it should cover, to the extent applicable: physical status and percentage of completion; status of approvals and regulatory compliance; inventory of sold and unsold units; estimated cost to complete; milestone-wise funding needs; "realistic timelines for completion and delivery"; and material risks.
Timing matters. Regulation 4G(3) says the assessment must be obtained before the invitation for expressions of interest under regulation 36A, and 4G(4) says it shall be incorporated in the information memorandum given to prospective resolution applicants. Its cost forms part of the insolvency resolution process costs, under 4G(5).
What must a resolution plan now say about homebuyers?
Project-wise specifics, not general promises. Substituted regulation 38A says that for a builder with any real estate project, every resolution plan shall provide project-wise details including: total units sanctioned, constructed and under construction, with sold and unsold units; treatment of claims of allottees "by way of possession of units, execution of conveyance deed, registration or transfer of title" or "refund of amount, or in any other manner"; treatment of allottees who have not submitted claims where they appear in the information memorandum; "timelines for completion and delivery of possession" project-wise, phase-wise or tower-wise; and periodic progress reports to the monitoring committee.
Homebuyers can also be bidders. Where the builder has a real estate project, the regulations let the committee relax certain conditions in the invitation for expressions of interest for "an association or group of allottees in such real estate project, representing not less than ten per cent. or one hundred creditors out of the total number of creditors in a class, whichever is lower." A separate proviso lets the committee relax the performance security requirement for such an association or group. The regulations also say the 0.25 per cent regulatory fee on realisable value is not payable where the approved plan for a real estate project comes from an association or group of allottees.
Possession need not always wait for a plan. Regulation 4E says that after approval of the committee with not less than sixty-six percent of total votes, the resolution professional shall hand over possession and facilitate registration where the allottee has requested it and has performed their part under the agreement.
The information memorandum that bidders read must now carry project-wise details too, including stage of completion, common area and amenity status, approvals obtained or pending, encumbrances and lender charges, pending litigation, RERA regulatory status including the balance in the designated bank account, the cost-to-complete assessment, and counts of allottees seeking possession, refund or conveyance.
Who watches the plan after it is approved?
A monitoring committee that now includes buyers. The new proviso says that where a corporate debtor has any real estate project, the monitoring committee "shall" include the authorised representative of the creditors in a class "or any other representative of the allottees chosen by their majority vote," and a representative of the concerned Real Estate Regulatory Authority and of the competent authority, if applicable, "subject to their agreement to be member." The monitoring committee submits quarterly reports to the Adjudicating Authority on implementation.
For Bengaluru buyers, the practical effect is that progress on a revived project should be reported against tower-wise timelines in the plan, with an allottee representative in the room.
What should a Bengaluru homebuyer do if the builder is in insolvency?
Engage early and ask for the new project-level information. Use this list:
- File your claim in Part II of the revised Form CA by the date in the public announcement.
- Ask the authorised representative whether the project has a separate bank account and a receipts and payments statement under regulation 4D.
- If the builder has several projects, ask whether your project's details were placed at the first committee meeting under regulation 4F.
- Ask when the regulation 4G cost-to-complete assessment will be commissioned and whether its findings will be shared with allottees.
- Indicate your preference for possession, conveyance or refund, knowing the plan decides the actual relief.
- Read the resolution plan for tower-wise timelines and the treatment of your claim under regulation 38A.
- After approval, track quarterly monitoring committee reports through the allottee representative.
Frequently asked questions
What did IBBI's 30 October 2026 amendment change for homebuyers?
Notification No. IBBI/2026-27/GN/REG155 dated 30 October 2026 added project-wise records and RERA fund-use compliance under regulation 4D, project exclusion and cost-to-complete rules under 4F and 4G, mandatory project-wise resolution plan contents under 38A, and allottee and RERA representatives on the monitoring committee.
Can one project be excluded from a builder's insolvency?
Regulation 4F lets the committee, by at least 66 per cent of voting share, recommend to the Adjudicating Authority with recorded reasons the exclusion of a real estate project from the insolvency process. The resolution professional files the application, and the Adjudicating Authority decides it.
What is a cost-to-complete assessment under the CIRP Regulations?
Regulation 4G requires an independent, project-wise technical and cost-to-complete assessment covering construction status, approvals, inventory, cost to complete, funding milestones, realistic delivery timelines and risks. It must be obtained before inviting expressions of interest and included in the information memorandum for bidders.
Will homebuyers be on the monitoring committee after plan approval?
Under the new proviso, for a builder with a real estate project, the monitoring committee shall include the authorised representative or another allottee representative chosen by majority vote, plus RERA and competent authority representatives if applicable and if they agree to join.
This article explains amendments to the IBBI CIRP Regulations for information only and is not legal advice. Each insolvency is governed by orders of the Adjudicating Authority.
Last updated 2026-11-10. PropNewz Team.
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