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HOME BUYERS IN THE CLUB OF FINANCIAL CREDITORS

Home Buyers Under IBC
HOME BUYERS IN THE CLUB OF FINANCIAL CREDITORS UNDER IBC (AMENDMENT) ORDINANCE 2018-Amendment w.e.f. 6th June, 2018
With the background of pathetic condition of home buyers due to malpractice of builders and recent developments, an ‘Explanation’ has been added to Section 5(8)(f) of IBC as under;
“An amount raised from an allottee under a real estate project shall be deemed to be an amount having the commercial effect of a borrowing.”
The explanation under Section 5(8)(f) will give rocket arm to the home buyers subject to the following acid test:
1.amount paid by the buyer to the builder
2.buyer is an allotee under an allotment letter&
3.linkage test with a real estate project
The onus will lie upon the home buyers and hence once, the above is proved by the home buyer, they will be treated as Financial Creditor under IBC.
Please refer an exhaustive write up on Home Buyers under IBC on the link below:

Financial Creditors under IB Code

For more information or any discussion feel free to connect on info@amlegals.com

 

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