Home buyers stepping in to bail out stuck real estate projects
Home buyers are increasing resorting to bailing out stuck real estate projects which the developers are unable to deliver for want of funds. The amended Bankruptcy Law which treats homebuyers on par with secured financial creditors is also facilitating this trend. However, experts are of the view that the move has its own set of hurdles. Last month, home buyers at a Mumbai luxury residential project received a go-ahead from the Bombay High Court to develop the project by raising money on their own. The buyers of the Orbit Terraces in Lower Parel managed to take over the project by negotiating a deal with the lending banks that agreed to sell off the project to recover their loans that the Orbit Corporation had defaulted on. “This happens in the stressed projects and in this way not only the project gets completed on time, but also the unsold inventory after completion gets sold,” said Deepak Kapoor, Director, Gulshan Homz. The real estate company has four residential projects in Noida. Industry experts see it as a win-win situation for both buyers and developers. According to them, for buyers the uncertainty ends and for the developers the much needed financial support is made available.
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