Unfinished Homes, Unsettled Rights: The Legal Status And Position Of Homebuyers With Respect To Real Estate Insolvency In India
- IJLLR Journal
- Aug 29
- 1 min read
Atri Chattopadhyay, National University of Juridical Sciences, Kolkata
ABSTRACT
The Indian real estate sector has grown rapidly in recent years, but this growth has come with persistent financial instability. Developers often depend on homebuyers ’advances to fund ambitious residential and infrastructure projects, especially as institutional investment through private equity and venture capital has shown sharp fluctuations. While homebuyers effectively act as creditors, the legal framework still treats them as unsecured consumers bound by agreements for sale that offer little protection. They lack security over their investments, have no clear timelines for utilisation or refund of their money, and face limited remedies when projects are delayed or abandoned. These weaknesses become most visible during insolvency, where individual buyers are often left without meaningful recourse. This paper examines the legal position of homebuyers in real estate insolvency proceedings, analysing how statutory provisions, contractual practices, and judicial interventions have shaped their rights. It evaluates whether current safeguards are adequate and suggests reforms—such as better protection of buyer funds, clearer priority in repayment, and stronger disclosure norms— to ensure fairer outcomes and timely completion of projects.
