New Delhi, July 1 -- Real estate bankruptcy resolution has received a fillip, with a recent change in law clarifying that land development authorities do not automatically get secured creditor status in the insolvency process. Lawyers said the amendment will be a major relief to banks and home buyers, as it will speed up the rescue of bankrupt projects.

Earlier, state-owned land authorities could claim the status of secured creditors under state laws. This meant they had priority to recover dues such as lease fees and taxes during the resolution process, putting them on the same level as banks and home buyers. The matter frequently landed in the courts, stalling the rescue process.

The Parliament amended under Section 3(31) of the Insol...