New Delhi, Nov. 3 -- Homebuyers have long borne the brunt of real estate insolvencies, in which a default in one project can drag the entire developer, along with all its other projects, into the National Company Law Tribunal (NCLT).

To shield buyers in financially sound projects from a developer's default elsewhere, the insolvency watchdog IBBI has notified new regulations enabling the Committee of Creditors (CoC) to recommend exclusion of healthy projects, even when the developer as a whole enters the Corporate Insolvency Resolution Process (CIRP).

With real estate accounting for 22% of all ongoing bankruptcy cases, second only to manufacturing at 36%, Mint explains what the new project-wise insolvency framework means for homebuyers a...